1951-06-19

CONCURRENCE IN REPORT OF SPECIAL COMMITTEE ON SOUND-AMPLIFICATION SYSTEM

Mr. Speaker:: I have the honour to present the report of the special committee appointed on the 8th day of June, 1951, to consider with Mr. Speaker the matter of an amplification system for this house. The committee begs leave to report as follows:
Your committee has considered types of installation used by other parliamentary bodies and has come to the conclusion that a sound-reinforcing system similar to the one which is installed in the House of Commons chamber in the houses of parliament in London, England, known as a low level system, would be the most suitable for our chamber. This system is designed specifically so as to make it possible for everyone in the chamber to hear any member who may be speaking, and to have his voice reproduced in all sections of the house at the same level as the speaker's natural voice.
The conclusion which has been reached by the committee for the installation of this system in our chamber is in accordance with the opinion expressed by government officials who are recognized specialists in this type of work. Also the assistant chief engineer of the Ministry of Works in the United Kingdom has inspected this chamber and has reported favourably as to the use of a similar system.
The committee was informed that in the British house the equipment is on an annual rental basis operated by trained employees of the company, and that it has been found advantageous. The company renting the equipment is under contract to keep it in proper working order at all times, to replace any parts which may give out or need replacement, and to instal improved equipment as, if and when it comes on the market. In other words, the company is required to keep and to operate the whole installation at peak performance at all times at its own expense.
Your committee therefore recommends that a sound-reinforcing system, similar to the one in the House of Commons chamber at Westminster, should be installed in our chamber, and that appropriate action be taken accordingly.


Right Hon. L. S. St. Laurent (Prime Minister):: If I have the unanimous consent of hon. members I should like to move, seconded by the leader of the opposition (Mr. Drew):
That the report of the special committee appointed on the 8th of June to consider with Mr. Speaker the matter of an amplification system for this house, presented this day, be now concurred in.


Mr. George A. Drew (Leader of the Opposition):: Mr. Speaker, in supporting the
motion and hoping that there will be unanimous consent, may I say that I know that the Prime Minister, you, Mr. Speaker, and others have observed the system in operation in the British House of Commons. I think those who have will be pleased with the recommendation to adopt a system which has proved so entirely satisfactory, and which will carry the voice in a natural way without any of the mechanical disabilities that accompany some other systems.


Mr. Angus Maclnnis (Vancouver East):: Mr. Speaker, if there is no opposition from any other part of the house to the motion for concurrence in this report, there certainly will be none from this group. We want to see the matter proceeded with as quickly as possible, and are pleased to give unanimous consent.


[Stage Direction]
Motion agreed to.

Louis Stephen St-Laurent: Mr. Speaker, when I indicated to the house on June 4 that the government intended to propose a session of parliament to begin in October, I stated that in the next few weeks the government would have to give consideration to the recommendations of the royal commission on national development in the arts, letters and sciences, and that some legislation arising out of its recommendations would probably be proposed before the end of this year.
After a preliminary examination of the report the government has come to the conclusion that there are two matters on which interim action should be taken at the present session. One of these is broadcasting. It is intended to leave until the session to be held later this year the matter of changes of a permanent character in the legislation, but, as hon. members are aware, the Canadian Broadcasting Corporation has for some time been faced with the serious problem of attempting to meet rising costs from a relatively fixed income. In order, therefore, to tide the corporation over until appropriate legislative provision can be considered, an interim grant will be proposed in the supplementary estimates shortly to be presented by the Minister of Finance. This grant will be

Arts, Letters and Sciences designed to cover the urgent requirements of the Canadian Broadcasting Corporation for the rest of the present fiscal year.
The government has also reached the conclusion that it is in the national interest to take immediate action to assist the universities to perform functions which are quite essential to the country, and indeed to the proper administration of the government of the country. We are not yet in a position to ask parliament to accept any permanent scheme for this purpose, but we have decided that grants should be made available for the forthcoming academic year along lines recommended by the Massey commission. An item will, accordingly, be included in the supplementary estimates of the Minister of Finance of a sum approximately equal to fifty cents per capita of the present estimated population of the country.
It is intended that this amount should be divided among the provinces in proportion to their population, and that within provinces the division among institutions should, as the commission suggested, be in proportion to their enrolment of students at university level. Parliament will be asked to empower the governor in council to make regulations to ensure these ends and to enable the Minister of Finance to seek the advice and assistance of an advisory committee or committees to be drawn from the national conference of Canadian universities.
In making this announcement I feel I should emphasize that the federal action is intended to provide a necessary supplement to the assistance to universities already made available by the provincial governments, and it is our earnest hope that no provincial authorities will regard this federal contribution as in any way replacing their own obligations to the institutions which they have been supporting in the past.
These federal grants are designed, moreover, primarily to assist the universities to maintain the highly qualified staffs and the working conditions which are essential for the proper performance of their functions-in other words, to maintain quality rather than to increase existing facilities. It is our feeling that if in any province increased facilities involving increased capital outlays are required by the universities, these should be met from the usual sources rather than from federal assistance. The recommendations of the commission with respect to scholarships will be considered and dealt with later.
I might add that in making these recommendations to parliament it is intended to avoid any possible suggestion that we are interfering in any way with the policies


respecting education in the respective provinces. It is for that reason we wish the Minister of Finance to have the power to consult with and get assistance from the conference of Canadian universities for the purpose of drafting regulations that will provide for the allocation of this grant in proportion to the papulation of each province, and within each province in proportion to the number of enrolments of students of university rank in the institutions. I am sure there can be no suggestion that in doing this there will be any interference with the absolute autonomy of the provinces and the provincial institutions in the field of higher education.


George Alexander Drew: Mr. Speaker, I am sure hon.
members generally will welcome any measure of assistance given in this way to the universities of Canada. In view of the fact that on behalf of the party I have the privilege to lead I proposed some time ago that these grants should be made as soon as possible, naturally we will welcome the grants to whatever extent they are made at this time.
I think there will also be general agreement with the view expressed by the Prime Minister (Mr. St.. Laurent) that a method should be adopted which will retain the complete jurisdiction of provincial authorities over education within the province. It will be necessary, of course, to recognize that this is only a temporary measure, because some recognized system will have to be established by which the amounts granted to the provinces will be related in the total to the requirements of higher education in this country.
There is a problem here which is not faced in the United Kingdom, but I would point out that there they have had for a great many years a system of university grants from the national treasury. Those grants are administered by the university grants committee, and are based not only upon the attendance at the universities but also upon the service they are performing in relation to the national development and cultural advancement of the country. It would not be simple or easy to have a similar system here, and perhaps it would not be desirable in view of the fact that education is under provincial jurisdiction. We have the advantage, however, of two bodies which can be of immense assistance in connection with the support of education, whether it be at university or secondary and primary school levels. We have a conference representative of the universities, and we also have the Canadian Education Association, which is an excellent example of the measure of co-operation that

can be established among the provinces in any field of common endeavour. At such time as it may be decided to extend still further the grants into the primary and secondary field of education, that body would be of great assistance in the advice and supervision it could extend. I feel sure that in this field, as well as in the field of universities, hon. members will agree that it is necessary to establish very clearly the jurisdiction of provincial governments.
So much for these grants to the universities.
I can only repeat that without being able to say how adequate or otherwise they may be, we will all welcome the statement that they will be made at this time without waiting for another session.
The Prime Minister has combined with the announcement with regard to grants to the universities the statement that there will be a supplementary estimate to provide additional funds for the Canadian Broadcasting Corporation. It may well be that that proposal will not meet with unanimity. Naturally, without knowing exactly the method by which the allocation will be made, it is not possible to consider the effect of this announcement, but I do point out at this time that this is not likely to facilitate the procedure in this house which many hon. members had hoped might lead to a fairly satisfactory disposition of some of the business now before us. Many hon. members will feel that the granting of additional money to the Canadian Broadcasting Corporation without an examination of other aspects of this problem is something that they will not welcome. We all recognize that from its inception the Canadian Broadcasting Corporation has enjoyed certain monopolistic privileges which do not receive unanimous support. I certainly would not wish to leave the impression that when that subject comes forward there will be the unanimity that there is in the support for grants to universities.


Mr. R. R. Knight (Saskatoon):: Although
there is no motion before the house, Mr. Speaker, perhaps you will grant me the privilege of thanking the Prime Minister (Mr. St. Laurent) for the announcement he has made this morning concerning grants to universities. There may be some debate as to the method or basis upon which such grants should be made. I noticed no mention of an allotment of grants on the basis of need, but we will leave that for the moment.
The Prime Minister has taken a step in the right direction. I hope that as a result of this action the universities will be able to reduce their fees, so that a university education may not be denied to any deserving
NATO Forces Agreement student. I congratulate the Prime Minister and his government upon the step which they are now taking.


Mr. Solon E. Low (Peace River):: I am
quite sure I speak for my colleagues when 1 say that we are very happy that the government is taking this step now to provide some form of interim assistance to the universities. I believe it is timely, because the universities are probably making up their budgets for the next year and they will want to know just what they can count on by way of supply. I should like to say to the government that I look upon this as the first step in a program, which we hope will be implemented throughout the years, designed to give further aid to education, and not confined to the university level.
With respect to the Canadian Broadcasting Corporation, I suppose it is only natural that the government would want to provide them with some further measure of temporary relief. We agree that government policy is to help the C.B.C. to expand its facilities, and they should do what they can now. But we reserve the right to discuss fully and in detail what further assistance should be granted when the matter of the Massey report is brought before the house during the autumn session.



NORTH ATLANTIC TREATY


[Stage Direction]
Right Hon. L. S. St. Laurent (Prime
Minister): I wish to make a statement, Mr. Speaker, with regard to an international agreement which was signed in London today by Canada and other parties to the North Atlantic treaty, and which is to be announced at about half past eleven our time in both London and Washington. It is entitled "Agreement between the parties to the North Atlantic treaty regarding the status of their forces," or, in abbreviated form "The NATO forces agreement." I am tabling the text of the agreement now for the information of the house. I have two copies in English here. We would have had it translated, but there is also an official text in French which is coming over from London, and we did not want to take the risk of making a translation that might vary in some details from the official text.
This agreement sets forth the rights and obligations of North Atlantic treaty countries in respect of their armed forces stationed in or passing through other North Atlantic treaty countries. The agreement is subject to ratification, and, of course' the approval
4280	HOUSE OF
NATO Forces Agreement of parliament will be sought prior to ratification. That will not be during the present session.
At the outset I should like to emphasize that this agreement does not deal with the question whether troops are to be sent abroad; and it has no connection with the question of command of integrated NATO forces. It is solely concerned with the laws and regulations which are to govern an armed force after it has been sent, by mutual agreement, into another North Atlantic treaty country.
It is a fully reciprocal agreement and will give valuable protection to Canadian servicemen serving in the integrated force. At the same time the rights of the receiving country are fully respected. The agreement provides that "it is the duty of a force... to respect the law of the receiving state, and to abstain from any activity inconsistent with the spirit of the present agreement, and, in particular, from any political activity in the receiving state."
General Eisenhower, in a statement issued today, says that it is a most important agreement, one of great significance to the integrated force under his command.
As there will be full opportunity for detailed discussion of the agreement in parliament in due course, I do not propose to take up time now with a clause by clause explanation. I will, however, list the main subjects dealt with in the agreement. They are:
1.	The criminal and disciplinary jurisdiction of the military courts of the visiting force and the jurisdiction of the civil courts of the receiving country;
2.	The application of the tax laws and customs tariff of the receiving country to the visiting force;
3.	The application of the immigration regulations of the receiving country to the members of the visiting force;
4.	The settlement of claims for damage or injury arising out of the activities of the visiting force;
5.	The procurement by the visiting force of goods, accommodation, labour and services from sources in the receiving country;
6.	The wearing of uniforms and the carriage of arms.
From this brief description of the scope of the agreement, hon. members will realize, I am sure, that the twelve negotiating countries, with their differing laws and legal systems' had to be willing to compromise in order to arrive at any agreement. It was realized that many countries might have to modify their laws to take account of the presence of other NATO forces in their midst, but an attempt 
[Stage Direction]
was made to reduce to a minimum the need for legislative change. The legal authorities of the Canadian government are studying the agreement to determine whether legislation will be necessary and if so, its scope and extent. It is expected that the whole question will be brought before parliament at the next session.
In conclusion I should like to quote the statement made today in London by the chairman of the North Atlantic council of deputies. He said:
The agreement on the status of armed forces which the North Atlantic treaty governments have signed today is an important addition to the structural framework of NATO. We believe we have developed a multilateral charter that provides a uniform and administratively workable basis for an orderly, consistent, and fair relationship between forces from one NATO country and any othef NATO country where they may be assigned to serve.
The agreement is part of the collective defence effort and is essential for the development of the integrated force under General Eisenhower's command. It gives the governments and the military authorities simple, practical procedures for regulating a complex relationship. It guarantees the members of the armed forces adequate legal protection, and at the same time, without infringing on the authority of the military command, fully recognizes the peacetime rights and responsibilities of the civilian authorities in the host countries.
The development of collective defence in peacetime requires that forces of various countries which form part of the integrated force for the defence of the North Atlantic treaty area be stationed in various other countries. They must be free to move from one country to another, in accordance with the demands of strategy and the orders of the supreme command. It is essential that there be uniformity of arrangements governing their status in countries other than their own and their relationship to the authorities and people of those countries. The conclusion of this agreement is an important step in our common effort to organize integrated strength adequate to keep the peace.
George Alexander Drew: I am sure that the house will welcome this further evidence of increasing measures of co-operation between the North Atlantic treaty nations. I think also that there will be general acceptance of the Prime Minister's statement that we welcome evidence of the increasing integrated strength of the United Nations.
I do not wish to appear to use this announcement as a vehicle for remarks about another subject, but in view of the critical importance of another matter that has been discussed, may I, in welcoming the announcement of this agreement, express the hope that, through the good offices of General Eisenhower, there may also be unanimity in another field and that it will not be too long before we also hear the announcement of an agreement in regard to the standardization of small arms and field weapons.



RAILWAYS, CANALS AND TELEGRAPH LINES CHANGE IN PERSONNEL OF STANDING COMMITTEE

Mr. L. D. Tremblay (Dorchesier) moved:: That the name of Mr. Conacher be substituted for that of Mr. Goode; that the name of Mr. Thomson be substituted for that of Mr. MacDougall; and that the name of Mr. Cannon be substituted for the name of Mr. Laing, on the standing committee on railways, canals and telegraph lines.
Motion, agreed to.



CRIMINAL CODE


Hon. Alphonse Fournier (for the Minister of Justice) moved: for leave to introduce Bill No. 391, to amend the Criminal Code.


Some hon. Members:: Explain.


Alphonse Fournier: This bill contains the annual crop of amendments to the Criminal Code which are the result of suggestions which come to us from various sources, such as the attorneys general's departments which are charged with the enforcement of the criminal law in the various provinces; provincial and municipal police forces; the Royal Canadian Mounted Police; national organizations; various departments of the federal government, and, last but not least, officials of the federal Department of Justice itself. These suggestions, in the nature of things, result in a rather mixed grill, and it is therefore difficult to give a short description of the subject matter which will be comprehensive. The following, however, will indicate some of the proposed changes:
1.	Amendments consequential upon the enactment of the National Defence Act;
2.	A revision of the sections of the Criminal Code which relate to offensive weapons;
3.	A clause increasing the penalty for offences of a seditious nature;
4.	Clauses relating to the improper use of mails and to theft from the mails, and the penalty therefor, and the delivery of the mail by walking letter carriers;
5.	A prohibition of the loitering about school grounds of those who have been guilty of certain offenses arising out of sexual aberration;
6.	Creation of a new offence in relation to driving while one's ability to drive is impaired by alcohol or any drug, and provision for the taking of chemical tests of a sample of bodily substance for use as evidence in cases involving drunken driving, or driving while the ability to drive is impaired by alcohol;
80709-272}
Criminal Code
7.	Definition of a prohibited act for a purpose prejudicial to national security, and the penalty therefor;
8.	Provision for a device requested by the attorney general of Ontario to assist in the apprehension of bookmakers;
9.	A clause to remove any doubt that women are qualified to serve on juries in criminal cases when they are qualified under provincial law to serve on juries in civil cases.
There are also other provisions of a minor nature, such, for example, as that removing doubt that notice of appeal must be given by the appellant to the Supreme Court of Canada within fifteen days after the judgment appealed from is pronounced, or within such further time as may be allowed.


George Alexander Drew: Mr. Speaker, I have no thought of making any extended remarks with regard to the announcement that these amendments will be introduced. I do not know whether the Minister of Public Works (Mr. Fournier), speaking today on behalf of the Minister of Justice (Mr. Garson), attached any particular significance to the words "mixed grill".


Alphonse Fournier: I did not prepare this statement.


George Alexander Drew: In view of the minister's
extremely exact mind, and his taste for some of the good things of life, I thought he might have had the idea that this measure was going to be as hot as a mixed grill should be. Perhaps that significance is not to be attached to the words he used.
In addition to those mentioned, there are some amendments which, if they are effective, will be welcomed. I should like to ask him if one of the recommendations that has been made a number of times is covered, namely, that there be some effective provision to deal with subversive activities such as those carried on. by agents of the Kremlin in this country during this period of crisis.


Alphonse Fournier: I mentioned a clause increasing the penalty for offences of a seditious nature.


George Alexander Drew: But no new provisions.
Motion agreed to and bill read the first time.



PRIVATE BILLS


[Stage Direction]
Bill No. 382, for the relief of Flora Muriel Crane Keane.-Mr. Winkler.
Bill No. 383, for the relief of Opal Jean Ellis Pike.-Mr. Winkler.
Bill No. 384, for the relief of Elphege Fournier.-Mr. Winkler.
4282	HOUSE OF
Inquiries of the Ministry


[Stage Direction]
On the orders of the day:
Mr. G. R. Pearkes (Nanaimo):: I wish to
direct a question to the Minister of Trade and Commerce, arising out of a cable I received this morning from Hong Kong confirming the statement already made that strategic cargoes are loaded at Macao for Canton in Canadian-flag vessels. Can the minister say whether he has any further information as to the nature of the cargoes carried in the Ming Sung vessels?


Right Hon. C. D. Howe (Minister of Trade and Commerce):: Perhaps my hon. friend
would tell me from whom he received his cable.


George Randolph Pearkes: My cable is from the China
coast guild.


Clarence Decatur Howe: I have no information at the
moment. We hope to have some shortly.



INQUIRY FOR RETURN


[Stage Direction]
On the orders of the day:
George Alexander Drew: In the absence of the hon.
member for Three Rivers (Mr. Balcer), I should like to direct a question to the Secretary of State or to his parliamentary assistant in connection with an order for return made on Monday, May 21, in connection with a question asked by the hon. member for Three Rivers. On June 14 the Secretary of State said, as reported at page 4068 of Hansard:
I shall make Inquiries and endeavour to expedite the return.
May I have an indication from that department as to when the return may be expected?


Louis Stephen St-Laurent: I will bring to the attention of
the Department of the Secretary of State the remarks made by the leader of the opposition. The Secretary of State is away this morning on other business, and he has no parliamentary assistant. I will communicate with the department and will try to ascertain when the return may be expected.


George Alexander Drew: Through you, Mr. Speaker,
with the desire to expedite such business as is before the house, I would point out that it is highly desirable that orders for returns which have been standing for some time should be completed as soon as possible.



INCOME TAX ACT

Hon. Douglas Abbott (Minister of Finance) moved: the third reading of Bill No. 296, to amend, the Income Tax Act.


Mr. J. M. Macdonnell (Greenwood):: I want to say just a word before this bill receives third reading. I want to express my regret again that the Minister of Finance made no attempt in any way to meet the views with regard to the five per cent feature of clause 12. I think the matter was much more serious than he appeared to regard it. It is just not possible for me to believe that the matter of finding a definition is insuperable. I want to record again my agreement with the hon. member for Eglinton (Mr. Fleming) for suggesting, though he would have much preferred to avoid the necessity of so doing, that it might be left to a regulation. All of these the minister turned down flat. Sometimes one feels that the minister is less cooperative than at other times.
I also want to repeat what I said a moment ago: really I cannot believe that the impossibility of finding a definition was the only factor; I think it is a fair inference that the minister had changed his mind on the situation, which, as he pointed out yesterday, he was entitled to do. Nevertheless-and again I refer to what the hon. member for Eglinton said-to throw overboard, I suggest with no adequate reason given, what had been passed by this parliament at the suggestion of the minister himself in his budget speech, to have that done as it was done yesterday, is just a fresh instance which makes us feel how low this parliament has sunk in the eyes of the government.


Mr. Speaker:: Is it the pleasure of the house to adopt the motion?


George Alexander Drew: On division.
Motion agreed to and bill read the third time and passed on division.



EMERGENCY GOLD MINING ASSISTANCE ACT


Hon. George Prudham (Minister of Mines and Technical Surveys) moved: the third reading of Bill No. 194, to amend the Emergency Gold Mining Assistance Act.


Mr. Donald M. Fleming (Eglinton):: I have just one brief comment to make on this subject. In view of the inadequacy of the relief provided for the gold mining industry by this measure, and the critical condition in which that industry finds itself today, will an

opportunity be provided at the fall session of parliament to review again the position of the gold mining industry? I would urge that there is no reason why that should not be done. I can see many reasons why it ought to be done. I can see abundant reason why it should be regarded as an urgent enough matter to claim the attention of parliament at the session three or four months hence.
I would ask from the Minister of Mines and Technical Surveys or from the Minister of Finance assurance that an opportunity will be afforded to parliament to review this whole question of the position in which the gold mining industry finds itself in consequence of government policy. May I emphasize the fact that it is tied up directly with government policy in reference to the international monetary fund. The governors of that fund are meeting in September. It will be a meeting of the highest importance, and parliament should have some report from the government in regard to what will take place at that September conference and an opportunity of expressing itself on the action of or position taken by government representatives at that conference.
In particular I would suggest this is a matter that is eminently suitable for review before a committee of this house, and I offer the further suggestion that the method found for promoting a review of government policy in regard to this whole subject should include a reference of the matter to the standing committee on banking and commerce, where officials could be heard and could give their evidence.
Motion agreed to and bill read the third time and passed.



CENTRAL MORTGAGE AND HOUSING


Hon. Robert H. Winters (Minister of Resources and Development) moved: the second reading of Bill No. 380, to amend the Central Mortgage and Housing Corporation Act.


Donald Methuen Fleming: Is the minister going to make a statement now?


Robert Henry Winters: This is a short bill containing only four sections. As hon. members know, the Central Mortgage and Housing Corporation Act was enacted in 1945, and has not been amended since. In the meantime the operations of the Central Mortgage and Housing Corporation have changed quite substantially. It has got into fields of construction and other operations not contemplated at the
Gold Mining
time it was set up to administer the National Housing Act. Some of the changes are quite incidental. For example, the Central Mortgage and Housing Corporation Act designated the responsible minister as the Minister of Finance. It is now proposed to change that. The board of directors is specifically designated so far as those appointed from within the public service of Canada are concerned. It is intended now to make that more general to provide additional flexibility.
A further change sought is one designed to increase the power of the corporation to borrow from the treasury by an amount equivalent to the investment of the corporation in foreclosed properties. Hon. members will recall that under section 24 the corporation is limited in its borrowings from the treasury to an amount owing to it on loans made under the various housing acts. The effect of this limitation is that the capital of the corporation becomes invested in foreclosed properties as they are acquired by the corporation. Already the units constructed by Housing Enterprises Limited have been taken over by the corporation, and some $24 million of the corporation's capital position is invested in this asset. What I believe was originally intended was that the borrowing power of the corporation should be limited to its over-all investment-including foreclosed real estate-in the National Housing Act. The effect of the proposed amendment is to place the corporation's investment in foreclosed properties in the same position as that of outstanding loans.


Donald Methuen Fleming: I do
not think this measure calls for extended comment on second reading. The amendments, on the whole, are of a formal nature. No question of policy in regard to housing is raised by any of these amendments. The house had an extended and timely debate on housing policy ten days ago; accordingly, I do not think that further comment on the present bill is required on second reading.


George Alexander Drew: Mr. Speaker, I just wish to add this thought. Without raising any question of general policy, I suggest to the minister that he give consideration to the evidence of great difficulty on the part of many of those who wish to build houses in carrying forward their projects under the present arrangements.
We will all hope that the situation which has been indicated in Windsor, and in some other cities, rectifies itself in the near future, but at this particular time our housing projects offer an opportunity for employment which
4284	HOUSE OF
Central Mortgage and Housing Corporation would be beneficial not only to those seeking employment but also to the people who wish to build houses.
No matter what statements may be made as to the number of houses built; no matter what statements may be made as to the provisions which are put forward by this government in co-operation with other governments, the simple fact remains that throughout Canada in the larger centres, and in some of the smaller communities as well, the housing situation is very serious. Many people are not able to obtain the houses they require. No matter what explanation we are given, that is the fact. Everything we can do should be directed toward the solution of this problem. I think this should be given particular attention at a time when it may be possible to obtain more workers in this field than could be obtained a relatively short time ago.


Mr. Hunter:: Mr. Speaker, I should like to suggest to the minister that he should consider the possibility of expanding housing in Canada today. In Toronto-


Mr. Speaker:: I hesitate to interrupt the hon. member, but this bill does not permit a general discussion of the housing question. The discussions should be limited to the provisions of the bill. Probably in view of the remarks that have been made already, I should allow the hon. member for Park-dale (Mr. Hunter) to make a brief statement.


Douglas Charles Abbott: It should be made on the other bill.


John William Gordon Hunter: My references will be brief.


Robert Henry Winters: May I suggest to the hon. member for Parkdale that his remarks could more properly be made on Bill No. 381, which is to follow this, and which deals with an amendment to the National Housing Act. That act has a more direct bearing on the housing situation generally.


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Beaudoin in the chair.
Section 1 agreed to.
On section 2-Corporation to .comply with directions of governor in council for minister.
Donald Methuen Fleming: There is a question I should like to raise on this clause, as to how far the corporation is merely an agent of government policy and how far it inaugurates policies on its own initiative in regard to housing in general. Would the minister make a statement as to the precise relationship between himself and the government on the one hand, and Central Mortgage and Housing Corporation on the other, in regard to housing policy in general?


Robert Henry Winters: Mr. Chairman, Central Mortgage and Housing Corporation was set up under the existing act in 1945 to administer the National Housing Act, which, as the hon. member knows, prescribes precisely the operations of the government in the field of housing. Since that time, and in carrying out its functions, Central Mortgage and Housing Corporation has developed a most efficient organization across Canada which the government found very useful in contemplating operations that were not so precisely defined under the National Housing Act.
As the hon. member knows, under an arrangement with Defence Construction Limited made recently, Central Mortgage and Housing Corporation is embarking on a broader program of construction operations. Therefore it was deemed advisable, in order that there should be no question of reporting to parliament or of the minister's responsibilities to parliament, that this section should be put into the act to make it quite clear that on matters of policy, and in fact to the extent defined by this section, the minister or the governor in council shall have direct control over the operations of Central Mortgage and Housing Corporation.
In a more direct reply to my hon. friend's question, matters of policy in the field of housing are determined by the government and carried out by Central Mortgage and Housing Corporation.


John William Gordon Hunter: I just want to have it made clear by the minister how far the exercise of the powers, duties and functions goes. That is to say, from now on the minister may exercise or direct the exercising of any of its powers, any of its duties and any of its functions and the corporation will be bound by that direction?


Robert Henry Winters: That is correct.


[Stage Direction]
Section agreed to.
On section 3-Board of directors.
Donald Methuen Fleming: Will the minister indicate what changes he contemplates making in the board of directors of the corporation in the light of this section?


Robert Henry Winters: There are no changes in contemplation in the structure of the board of the corporation. This is merely to provide for flexibility in the event that more flexibility is required.


Donald Methuen Fleming: In other words, you are simply seeking to widen the opportunity of selection on the part of the minister?


Robert Henry Winters: That is correct.


Donald Methuen Fleming: But you have not in mind at the moment any use of that opportunity?


Robert Henry Winters: That is correct.


[Stage Direction]
Section agreed to.
Sections 4, 5 and 6 agreed to.
Bill reported, read the third time and passed.


Robert Henry Winters: the second reading of Bill No. 381, to amend the National Housing Act, 1944.
He said: On May 11 I made a statement to the house concerning changes to the National Housing Act. At that time I pointed out that in recent months mortgage interest rates, like other interest rates, had risen, and as a result lending institutions were participating in a lesser degree in National Housing Act loans. Other forms of investment have become relatively more attractive to lending institutions, and even in the mortgage field itself higher interest rates on conventional mortgage loans had the effect of reducing the interest of the lending institutions in loans under the National Housing Act.
This bill has the effect of making it possible for the government-within prescribed limits -to change the rate of interest payable by the borrower under National Housing Act loans. The bill authorizes the governor in council to establish interest rates payable by the borrower, provided that such rate, when established, shall not exceed two per cent in excess of the average yield upon long term government securities. This flexible approach departs from the fixed rate contained in the National Housing Act, 1944. However, hon. members will recall that the National Housing Act, 1938, provided that the rate of interest payable by the borrower was to be established by the governor in council. It is felt that this flexibility is desirable so that the government will be in a position to keep interest rates under the National Housing Act in relative conformity to other interest rates.
As I indicated in my statement of May 11, it is the government's intention, if this legislation receives the approval of parliament, to establish an interest rate, payable by the borrower on joint loans, of five per cent. In such circumstances the lending institutions, upon their share of the joint loan, would earn a gross interest rate of five and a half per cent, and Central Mortgage would earn three and a half per cent on its share of the joint loan. Upon approval of this legislation it would also be our intention to adjust interest
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rates for other types of loans under the act by a similar one-half of one per cent. For instance, loans to limited dividend companies under section 9 of the act would be made at 3J per cent. The rate of interest upon rental insurance loans would be at 4} per cent. Loans to primary producers would be at 4J per cent. The changes in the act, other than the one to which I have referred, give effect to the interest rate being established by the governor in council, and in themselves effect no change.


Donald Methuen Fleming: Mr. Speaker, there are some features of this bill which I think the house will view with regret. The minister has sought to make out his case for assumption by the governor in council of the power to fix interest rates under various sections of the act by the plea that this will have the virtue of flexibility. That same argument might have been used not many years ago with opposite effect when complaints were being made that the rates then prevailing under the act were too high, and that construction of more housing would have been encouraged and assisted had the rates been lower. But we heard no talk from the government at that time about the virtue of greater flexibility in these rates.
I view with some degree of misgiving any further step by way of amendments to the housing act which takes legislative power away from parliament and vests more power in the governor in council. The demonstrations we have had in recent months of the way in which the governor in council not only uses the power it now possesses, but arrogates to itself powers that belong only to parliament, are not likely to commend to the house the assumption of further power on the part of the governor in council at the expense of parliament.
What have we seen done by the cabinet under the powers contained in the act, and indeed beyond the powers contained in the act? On February 5 we saw the governor in council completely nullify an important enactment of parliament in November, 1949, the importance of which was emphasized in 1949 not simply by opposition members but by the government, and which was put before the house and the country as the fulfilment by the government of a solemn promise made to the people of Canada in the election campaign of the previous spring.
The essence of the bill is to eliminate from the act a number of provisions establishing the rate of interest, and, in lieu of such provisions, to vest in the cabinet the power to determine such interest rates. If one had confidence that the rates would be

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established in a realistic manner, with due regard for the serious housing situation we still have in this country and the means available to the government to assist in meeting it, there might be less objection in principle than there is to amendments of this kind. But one cannot see anything in this bill except the assumption on the part of the cabinet of the right to determine interest rates under a number of sections of the act. Last February the government tore up the provision made by parliament with reference to the one-sixth additional loan. A month ago they announced an increase in the rates of interest to be permitted under part I of the housing act, and presumably what parliament is being asked to do. now is to give belated approval to a decision already taken by the government far in excess of any power it possesses under the act.
I, for my part, and with reference to this government, do not approve legislation that gives them these additional powers. I am not satisfied by any means that they have wisely, correctly or responsibly used the powers they already have under the act. They certainly have not used them fruitfully. On the contrary, in many important respects they have nullified provisions that parliament has made. I urge that the government would be better advised to apply their ingenuity and the powers they already possess to assist in the construction of more houses rather than in reaching out for more powers of this kind. Let them devote their energies to putting drive, impetus and energy behind the efforts that are being made by private builders, limited dividend housing corporations, municipalities and provinces to get more houses built.
Let the minister use his influence with the Minister of Defence Production to see that the importance of constructing houses is recognized when it comes to the allocation of essential materials. The minister indicated in a speech made in London a week or ten days ago, which was referred to in the house the following day, that no priorities have yet been established in favour of housing with respect to building materials. As long as that situation prevails, housing is going to come out second best in the competition with other forms of building enterprise for the limited and now quite inadequate supply of building materials available. I urge that the government open their eyes and see the serious situation in which the country finds itself at the present time as the result of inadequacy of housing, and use the powers they now possess to redress that serious situation

instead of reaching out for powers which will be used by the government to raise interest rates.
The increase of one-half of one per cent in the interest rates announced by the minister is not, as I said before, nearly as serious an obstacle in the way of increased housing as some of the other mistakes the government has made. One in particular which they made last February, when they cancelled the provision of the act providing for the additional one-sixth loan, came on top of the freezing of lending values under the act, a policy which I submit was directly contrary to the expressed determination of parliament.
The increases that the minister has announced are not necessarily the end of increases of interest rates under the act, and if the bill before the house today passes the government will be in a position to increase further the interest rates prevailing under various sections of the act without ever coming back to parliament for approval. At least this may be said for the present provisions of the act fixing the rates of interest right in the terms of the legislation, that the government cannot change them without coming back to parliament. Parliament then has an opportunity to express its views on any proposal for an increase. If we ever had a situation in this house where members supporting the government would view the Canadian housing situation in its naked and ugly reality, then we might have the occasion in this house to express our disapproval by rejecting the proposals of the government for such changes as upward increases in interest rates.
Because it is so vitally important that parliament should retain control over policy in these matters, that parliament should be consulted before upward adjustments in interest rates are made under the act, I think the house should reject the request of the minister for more and more power to make such changes in interest rates as are proposed in this bill. It is true that some limitations upon the power of the minister to make these upward adjustments are proposed in the bill, but no one can foresee the extent to which interest rates may be varied under this bill. I believe parliament ought to retain the right to say, in the light of increases or decreases in prevailing interest rates in the bond or mortgage markets, whether corresponding changes should be made in the rates to be charged under this bill. Let parliament retain power for once. Let parliament retain

the right to say now and in the future whether conditions do or do not justify increases in these interests rates.
Under the National Housing Act interest rates have been considered of very great importance. Right from the time this bill was introduced in 1944, interest rates under the act have been properly regarded as one feature of the legislative housing program of very high importance. Now the government is saying: Turn over to us the power to set the interest rates, and to do so without consulting parliament. In the light of its experience and the treatment its legislative enactments have received at the hands of this government, I do not think parliament is justified in giving the government this further power and at the same time giving up its own control over these interest rates. In the mind of the government unquestionably that would be equivalent to approving what it has done in nullifying enactments made by parliament in this very act. I hope nothing parliament may do will give any measure of approval to What this government has done, without the slightest consultation with parliament, to the enactments we adopted in the fall of 1949 with high purpose and high hope, which this government has chosen to destroy. The sort of bill we have before us invites an extension of the powers of the government. By its actions in the past the government has not justified any such extension of its powers at the expense of parliament.


Mr. J. W. Noseworthy (York South):: Certainly there is need for some legislation such as this at the present time in order to meet the housing situation. As I understand it, building is practically at a standstill. I have personal knowledge of builders who took orders for houses months ago, but who have refused even to turn a sod in order to proceed with those houses until the matter of interest rates is settled. What has happened in the building industry is that the finance companies have gone on strike. There has been what labour would call a sit-down strike so far as the finance companies are concerned in relation to national housing. They just refuse to lend money at the interest rate set forth in the statute, and they will continue to do so until the matter of interest rates is settled to their satisfaction. Consequently some such legislation such as this is needed.
The need grows out of government policy. The housing policy of this government, as set forth in the National Housing Act, is tied hand and foot to the finance companies. The government, the builders and the purchasers of this country are completely at their mercy
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so far as building houses under that act is concerned. These companies are in a position to determine whether or not they will lend money at the rates set forth in the statute. They are in a position to determine to whom they will lend money. They, not the national housing authorities, must approve the borrower if the money is to be made available. So long as the government is wedded to these concerns, as it is, just so long will it be necessary for us to provide legislation such as this, or we will get no money. What we need in Canada today is houses. The government's policy provides for the building of houses only through loans made by finance companies. So long as that policy prevails we must meet the terms of those companies or get no houses.
Now the question comes up that has been raised by the hon. member for Eglinton (Mr. Fleming), whether these rates should be determined by the governor in council or whether the authority should be retained by parliament. Here again, as long as the policy of this government prevails, which I presume is supported by the party to which the hon. member for Eglinton belongs, if we are to get money there must be some flexibility in the regulations governing the making of loans. If we were to fix a definite rate of interest and three months later such fluctuations had taken place in the bond market that the finance companies refused to lend at that rate, as they might, we would be left without the finances necessary to build houses. The need for this flexibility is due entirely to the policy followed by the government in relation to this whole matter of financing the construction of houses.
The second point is that I do not know whether it makes a great deal of difference in this particular parliament whether the government or parliament has the right. With the majority the government has, I see no difference between what parliament says and what the government says. I have not witnessed any occasion here on which any considerable number of members on the other side of the house were in opposition to any measure or policy introduced by the government. So I think in this house government policy and the policy of parliament are synonymous. There are those of us on this side of the house, of course, who will oppose government policy. Probably there are those of us who will be critical, but my experience here has been that the majority is always willing to go along with the government regardless of what the measure may be. So far as the building of houses is concerned

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I do not think it will make much difference whether parliament has the last word in determining the interest rates, or whether the governor in council has the last word, because whatever measure the governor in council recommends to this house is likely to be supported by the Liberal majority.
There are two or three things m relation to this bill that I want to mention. I hope that this measure will be helpful, and that these rates will meet with the approval of the finance companies who control our national housing policy. The government, even the governor in council, is completely at the mercy of these finance companies so far as securing money to build houses is concerned. If the government were willing to give direct loans under the National Housing Act, except somewhere in the backwoods where the finance companies will not make a loan, then there might be some chance of the government asserting its independence of these finance companies. Personally I can see no reason whatever for the government catering to these finance companies to the extent that, no matter how desperately houses may be needed, the government must leave the financing to them. If the project is located in territory in which the finance companies have no offices, where it is going to be a little costly for them to send valuators and they do not want to make a loan, then the government will make one. They made one last year, I believe, to one farmer in Canada.
The first thing the government should do is to revise its policy with respect to the making of loans, and, if the finance companies will not lend money under proper interest rates where houses are needed, then the government should make the loan directly. The second change needed is the restoration of that additional one-sixth loan. There are still a great many people in the middle class brackets for whom national housing units are suitable, and who would buy houses if the down payments were within their reach. The one-sixth additional loan was very popular. A high percentage of the houses built under the National Housing Act while the one-sixth loan was in effect were built with the assistance of that one-sixth loan. If we want to provide houses for people we must first make it possible for the houses to be built, and then for the purchasers to be able to secure them. The removal of that one-sixth loan has created a difficulty which will deprive a great many people of homes they would otherwise be able to secure. With the cost of houses running from $8,000 to $10,000, and the down payment demanded now, the
(Mr. Noseworthy.]
National Housing Act does not provide houses for the great mass of the people who need them. No matter what change we made in the interest rate, it would not affect the great mass of people. Those who are in greatest need of houses can only be provided with houses under a joint partnership of the federal and provincial governments for the construction of low rental housing projects. If such agreements can be reached and more houses built under those agreements, then there may be some prospect of those in the lower income groups securing houses.
Another thing which is necessary is that definite priorities should be established on building materials for use in the construction of houses. The minister's report recognizes that residential properties never get the first opportunity of securing building materials. In a market such as we have today, houses are simply left out of the picture. There is no question about it; unless the government can establish some priorities on building materials for residential properties, housing projects are going to be hampered more and more by material shortages.
I believe that the restoration of the one-sixth addition loan, the establishment of priorities for building materials, and a change in government policy to the point where the government will make loans directly through the National Housing Act, are needed in order to meet the housing requirements of the Canadian people.
1 am going back to one other question which I discussed with the Minister of Finance (Mr. Abbott). I cannot understand why the government cannot give some assurance to United States investors that the money they invest in a housing project, if that project can be liquidated within a period of three or four years, can be taken back to the United States. The minister's answer was that it has been government policy to permit foreign investors who might liquidate their assets to take those original assets back to the United States. The minister states that that continued to be government policy even during the war years, and is government policy now. But the foreign exchange control board will give no assurance whatever to a United States investor that the policy may not be changed overnight. They will give no assurance-


Douglas Charles Abbott: That is one of the incidents of control.


Joseph William Noseworthy: -that if in two years' time those assets can be liquidated there will not be a foreign exchange control board regulation which will prevent those assets from

being taken back to the United States. I cannot see where Canada would lose by giving some such assurance.
Let us assume that here is a building project and here is American, capital up to, let us say, a quarter of a million dollars; and there is American capital available for housing projects in Canada under the National Housing Act if those investors could be assured that when the project is completed, when the houses are sold, when their assets are liquidated, they will be able, if they so desire, to take that money back to the United States. I cannot for the life of me see how Canada is adversely affected by giving some such assurance. Without it, we shall not get for investment some of that money at least; and the worst that we could expect is that these original investments, which we would not have received in any case, are the only ones that would be restored to the country of their origin.
The minister has not shown me how the giving of any such assurance for a limited period-I can understand that you would not want to give it for an unlimited period of time-would adversely affect the Canadian economy. If the minister convinces me, he will certainly have to give something more than the bare statement which he made when I raised this question before.


John William Gordon Hunter: Mr. Speaker, I was surprised to hear the hon. member for Eglinton (Mr. Fleming) object to these interest rates being made more flexible. Goodness knows, some of his party should realize that with other interest rates going up and down, flexibility must be made possible in these interest rates. I feel, however, that that view is no more inconsistent than, is the general policy of that party.
As to the objective of this bill, namely, to make interest rates flexible under the minister, I feel that it is a sound move and a necessary one if we wish to get more money out on the market under the National Housing Act. A large percentage of the money comes from the lending institutions; and in order to get it out, we have to meet the current interest rates. I note with regret, however, that there is nothing in this act to indicate that housing is to be promoted more rapidly than it has been promoted in the past, and there is nothing in the statement of the minister to indicate that housing will not fall off. I am not particularly concerned about the one-sixth loan, which is the one-sixth second mortgage. That is only one method of achieving the same thing. The question of a low down payment can be met equally by having a more realistic lending value.
National Housing Act
But the point is this. We are either going to have to accept this as a straightforward anti-inflationary measure, or we are going to have to accept the view that housing is something more than materials' and dollars and cents-of course those things are obviously important-and that it has a social value. In my opinion, Mr. Speaker, housing is one of those things that go beyond dollars and cents and beyond shortages of building material. Housing is something that affects the whole nation. It does so in many ways. By a shortage of housing, and by the use of obsolete housing, we place ourselves in the position of paying large bills through taxation and in other ways. We all know the social need for housing. If hon. members were acquainted with some of the frightful conditions existing in some places in Canada -for instance, in the city of Toronto-they would realize that housing is not just a matter of dollars and cents.
I have the greatest admiration for the cleverness of the president of the Central Mortgage and Housing Corporation, but sometimes I wonder whether his wisdom matches his cleverness. I have great admiration for his intelligence, but sometimes I wonder whether his humanity matches his intelligence.
The question of housing is one that must be taken from the point of view of human suffering and human welfare. For instance, if we were to adopt an anti-inflationary measure, a real one would be the cutting off of the old age pension. But obviously we do not cut off the old age pension because that is a social welfare measure which is much needed in this country. Similarly, we do not cut off the family allowance. Obviously to do that would be an antiinflationary measure. We do not do it, obviously because it is a social necessity.
I urge the minister to consider seriously whether housing does not come under the same category. If he considers the matter seriously, I think he will find it does. I know that he set it second to national defence. I think he must realize that something must be done, and soon. I think he will find that housing has been and is recognized by this government as a matter of social welfare.


Mr. C. E. Johnston (Bow River):: Mr. Speaker, I want to say a few words generally about this bill. I have spoken on it on various occasions, and I have expressed myself clearly with regard to it. I think that the time has come-and I believe that everyone in this house recognizes it-when housing must be considered as an emergency measure. It is an emergency measure from

National Housing Act
more than one point of view. It is an emergency measure from the standpoint of the morale of the people of Canada. You cannot expect people who are living in unhealthy conditions, in unhealthy surroundings, to have the moral standards that we require of the Canadian people. Social life is affected directly by the housing problem. No matter where you go, if you find congested living conditions, you find deterioration in the social standards. That is not good from the point of view of the standard of citizenship. It is not good for the building of Canadian morale.
It is true that there has been an increase in the price of building materials, but there has never been any decrease in the desire of people to obtain houses. The only thing that stopped the building of more houses- the only thing that lessened the increased construction of new housing-was the fact that the lending companies went on a sit-down strike. I can understand any business concern, labour organization or industrial concern going on a sit-down strike if they are not making a reasonable profit. But surely this cannot be said of the lending institutions, It would seem to me that five per cent is an exceptionally good return on one's capital. I know that most individuals would be well satisfied if they could get a five per cent return on their capital. Not only that, Mr. Speaker, but this enterprise is the more enticing because the government guarantees them against twenty-five per cent loss. I do not see where you could find a better investment for mortgage companies in the building of houses. Yet we have come to the point, as the minister indicated in his speech the other day, where building is being retarded because the lending companies will not make the necessary loans, and their excuse is that they could make better investments in other fields. It should not be forgotten that the government came to the assistance of the lending companies not many years ago when this national housing program was put into effect. The lending companies were practically at a loss to make investments, and the government started the national housing program. Then the lending companies were able to find a lucrative field of investment. They received a guarantee against loss.
It seems to me that since we have guaranteed the companies against loss they should be a little bit reasonable in this time of emergency in housing. You will recall, Mr. [Mr. Johnston.1
Speaker, that a few years ago we reduced the interest rates on annuities. That was the only field in which the ordinary little man had a chance to invest his money with a chance of fair return. It used to be four per cent, but the government took the view that four per cent on annuities was too much in comparison with the interest rates on other securities.


Douglas Charles Abbott: Earning power of government bonds.


Mr.   Johnsion@: Yes.


Douglas Charles Abbott: The interest return on government bonds.


Charles Edward Johnston: Yes; but look at government bonds today. The government appealed to the people to invest their money in bonds. This was the one sure investment. You would not stand any losses there. But look at government bonds today. All the other companies are demanding increases in interest rates. We have the lending companies in the housing field-an essential activity, one that is necessary to the well-being of Canada- saying that they will not lend any money unless they get an increase in rate. But the government do not say that since other fields of investment are increasing interest rates, therefore they are going to increase the interest return on annuities, or that they are going to pay higher interest rates on government bonds. There should not be such a great divergence between the interest rates which the lending companies get on their money, and that which private individuals get on theirs.
It may be said that there is a greater risk from the point of view of the lending companies, but in this particular field there is no risk. Experience has proven that the companies have not taken any loss whatever under this plan. Building costs have increased because of increased wages, but there is some excuse for that, because increased wages have to be paid on account of the general rise in the cost of living.
Then we have had an increase in the cost of materials. That too was probably necessary under these conditions. It seems to me that this bill is not so much concerned with assisting housing as it is with assisting lending companies. The ibill is wrongly entitled. It should be a bill to assist finance companies.
Even though this increased rate of interest is applied, people are going to take advantage of it because they must have houses. But

just look at the position in which it puts the purchaser of a house. I am saying to you, Mr. Speaker, that five per cent is too much for a man to pay to get a house built. He just cannot pay that kind of interest. When he was speaking the other day I think the hon. member for Spadina (Mr. Croll) made the same suggestion that I have made on many occasions, namely, that the government itself should go into the lending business for house building. It is so necessary from more than one point of view.
If the government can borrow money at three per cent or less, then why can they not lend it out under this national housing program? They do not even have to lend it at three per cent; they could lend it at an even higher rate and still be away below what the lending companies are asking. If we really consider that housing is so necessary, and if the government are so desirous of everybody having a house in which to live, a home in which to raise a family, surely this could be done.
I think, too, that this would be an opportune time to reinstate the additional one-sixth loan. It is difficult for people now to get money to start out. In fact it is just impossible under this plan for people to get sufficient money to make their down payments under the housing plan.
I should like the government to reconsider their stand on national housing. We should not now increase the interest rates to the common man who must have a house. The common man must have a house. Even though the government decides to allow this increase, the people will have to accept it. They have no alternative, because they must have some place in which to rear their families. But it seems an arbitrary way of forcing these people to come into line.
I have never contended that individuals or companies should work for nothing. I have always maintained that everybody is entitled to a fair return on money invested or on services rendered. But I do not think we would be imposing a hardship on anyone in this instance, particularly with all the guarantees behind it, if we asked that this increase in interest rate be not implemented at this time.
I should like to suggest very seriously that the government go into the field of lending money at a much lower rate of interest than is provided for under this plan.


Mr. William Bryce (Selkirk):: Mr. Speaker, I want to let the minister know that I do object to this increase in interest rates. In my experience in Canada I do not think there
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is anything that has broken more people than high interest rates. To be anything in Canada you must have your own house. If a man has to pay more interest over a period of years than he pays for his house, it just breaks him. I have seen this even in the farming business. I have known men who bought farms and who have paid far more in interest than they ever paid for the farm. And that sort of thing breaks the back of so many people.
I agree with what the hon. gentleman who preceded me (Mr. Johnston) said about the government lending the money. I do not see why they should not lend the money. They do it in other countries, and they could do it here. If the rates are not satisfactory to the insurance companies who are lending money at the present time, then the government should look after the people first.
I appeal to the minister to take a trip to New Zealand and see what they have done there. I am not going to go into it. I am not going to put it on the record, but if the minister wants the information I can give it to him, because I was there and saw it at first hand, along with some,of my colleagues in the house.


Angus MacInnis: Mr. Speaker, I doubt very much if this measure is worth all the time we are giving to it this morning. What this country needs is a. measure that will help people who need houses and who are not able to finance them,, either to build or to buy houses. This bill will not assist in that way. Those fortunate persons who can come within the provisions of the National Housing Act in connection with building houses could build them without the National Housing Act. If the minister is going to do something to enable the ever-increasing number of families in Canada who need houses to get them, something better than what is contained in this act will have to be provided.
I am an inveterate reader of newspapers, and I seldom open a paper these days without finding statements by jurists who are called upon to deal with delinquents that our deplorable housing conditions are leading to crime and immorality. Social workers say the same thing. If a sufficient number of houses could not be built under the interest rate provided heretofore in the act, the raising of the interest rates is not going to facilitate building.
I do not believe that we should blame the lending companies for wanting higher interest
4292	HOUSE OF
Natural Resources-Prairie Provinces rates, because, after all, they are in the lending business to make a living. Regardless of whether we 'believe that an interest rate of -five per cent, six per cent, or whatever it may be, is high enough, is not particularly 'important to the lending companies. What is important is the rate they can get by holding out by refusing to lend money unless they get those rates. The people need houses, and need them badly, and I suggest to the minister that he bring in a measure that will help the people to meet that need.


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Beaudoin in the chair.
Sections 1, 2 and 3 agreed to.
On section 4-Interest, amount and term of loan.
Donald Methuen Fleming: In view of the appearance in this section of the term "lending value", I should like to ask the minister if any change is contemplated by his department or by Central Mortgage and Housing Corporation in regard to the present method of determining lending value. Is the department still adhering to the retention of the lending value as of January 1, 1950?


Robert Henry Winters: Yes. The policy is still to adhere to the lending value prevailing at January 1, 1950, for reasons which I am sure are obvious to all hon. members and which have been discussed previously in this house. It is an anti-inflationary measure designed to act in the interest of home owners in seeing that they do not pay more for their houses than they have to under the circumstances.


Donald Methuen Fleming: It may be an anti-inflationary measure, but it is also an anti-house building measure, as things stand at the present time.


[Stage Direction]
Section agreed to.
Sections 5 to 18 inclusive agreed to.
Bill reported.
At one o'clock the house took recess.
The house resumed at three o'clock.

[Stage Direction]
Ninth and tenth reports of standing committee on railways, canals and telegraph lines.-Mr. Breithaupt.
IMr. Maclnnis.]


Alphonse Fournier: the second reading of Bill No. 385, to vary the Manitoba natural resources agreement.


George Alexander Drew: Explain.


Mr. James Sinclair (Parliamentary Assistant to the Minister of Finance):: Mr. Speaker,
there is really very little I can add to the explanation I gave on the resolution stage. The bill actually dates back to 1879 when the Public Lands Act of Canada was passed setting aside two sections in every township for school purposes. The proceeds from the sale of the two sections were to be put in a trust fund and the interest from that trust fund paid to the provinces for school purposes. There was a provision in the act of 1879, similar to the provisions in most federal acts concerning trust funds, that those funds should be invested in government of Canada securities.
In 1930 the natural resources were transferred to the three prairie provinces, Manitoba, Saskatchewan and Alberta, and those trust funds were also transferred. Final transfer has only been completed as of July 1, 1950. The premiers of the three provinces have now asked that, since these trust funds are now under the jurisdiction of the provinces, the provinces be allowed to invest not only in government of Canada securities but in securities of the provinces, or municipalities in the provinces or of local school boards. The federal government has . agreed. In the appendix to each one of these three bills you will find the agreement between the Minister of Finance (Mr. Abbott), speaking for the federal government, and the premier of Manitoba, the provincial treasurer of Saskatchewan and the premier of Alberta, speaking for the various provincial governments.
The sole intent of these bills is to give the provincial governments, who have control over school lands trust funds, the right to invest the proceeds from the sale of these lands in provincial, municipal and school board securities as well as in government of Canada securities.


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Dion in the chair.
On section 1-Short title.
James MacKerras Macdonnell: May we have the figures to show the amounts involved?


James Sinclair: The amounts involved that I can give are shown on page 51 of the public accounts for this year. These were the amounts in trust in 1930 when we turned these amounts over to the three provinces. Since that time of course the provinces have probably sold more lands and set up their own trust funds. However, so far as the federal government is concerned, the Manitoba amount is $5,919,862.05, the Saskatchewan amount is $17,809,039,' and the Alberta amount is $9,564,569.20. On these we were paying 4 per cent. We are very happy to have the provinces take these things over because after all we do not get 4 per cent when we issue securities ourselves. The provinces have asked for this so that they will be allowed the extra field of investment for their funds.


James MacKerras Macdonnell: In other
words, this is provincial property, and all this is doing is to alter slightly their powers of investment.


James Sinclair: Quite right.


[Stage Direction]
Section agreed to.
Section 2 agreed to.
Title agreed to.
Bill reported, read the third time and passed.


Alphonse Fournier: the second reading of Bill No. 386, to vary the Alberta natural resources agreement.


[Stage Direction]
Motion agreed to, bill read the second time, considered in committee, reported, read the third time and passed.


Alphonse Fournier: the second reading of Bill No. 387, to vary the Saskatchewan natural resources agreement.


[Stage Direction]
Motion agreed to, bill read the second time, considered in committee, reported, read the third time and passed.
Canadian National Railways CANADIAN NATIONAL RAILWAYS

Alphonse Fournier: that the house go into committee to consider the following resolution:
That it is expedient to present a measure to provide for the refunding of matured, maturing and callable obligations of the Canadian National Railways and for the issue of securities guaranteed by the Dominion of Canada in respect of such refunding to an aggregate principal amount not exceeding $200 million.


James MacKerras Macdonnell: May we have a statement now?


James Sinclair: Mr. Speaker,
there are two main C.N.R. bills as far as finance is concerned which come before parliament. One is the annual bill, the resolution concerning which will be discussed after this one, for the financing and guaranteeing of C.N.R. obligations. The second is this refunding measure which is not an annual bill. The bill to be founded on this resolution is to provide for the refunding of Canadian National Railways securities maturable or callable in the years 1951 to 1955. Provision is made either by the issue of railway bonds guaranteed by the government or by temporary loans from the government. The amount provided is $200 million, the same as was provided in exactly similar acts passed at the 1935, 1938, 1944 and 1947 sessions. I have a table of the maturing issues in the period to which I have referred. I think it would be very useful if I could put it on Hansard now so that when the bill comes up for second reading hon. members will see exactly the field which is being covered. If I have unanimous consent, I would ask that this table of the issues which are either maturing or callable in the period of the resolution shall appear in Hansard.


Mr. Fraser:: What is the total?


James Sinclair: The total is $216,734,265.23.


Mr. Speaker:: Has the parliamentary assistant leave to have this table included in Hansard?


Some hon. Members:: Agreed.

Canadian National Railways


James Sinclair: The table is as follows:



CANADIAN NATIONAL RAILWAY COMPANY MATURING OR CALLABLE BOND ISSUES 1951-55

[Stage Direction]
Maturity Date	Issue	Interest Rate	Where Payable	Amount OutstandingVarious 1951-55	
Various 1951-55	
June 1, 1951	
Sept. 1, 1951	
July 10, 1953	Instalments payable under equipment trust issues and hire-purchase agreements.... Newfoundland Railway instalment notes.. G.T.W. equipment trust	
Canadian National	
Canadian Northern	% Various 2i 21 3 3 5 4 4	Canada	
United States	
United States	
Can., London, U.S	$ cts. 62,735,088 90 711,030 00 284,000 00 48,022,000 00 1,162,768 33 35.000.	000 00 50.000.	000 00 9,947,934 00 8,871,444 00 216,734,265 23Jan. 15, 1959	Canadian National	(Callable Jan. 15, 1954) Feb. 1, 1954	Canadian National	Jan. 1, 1955	April 1, 1955	Grand Trunk Pacific	Can., London, U.S	
Recapitulation-
Payable in Canada	$ 147,735,088 90
Payable in London	 1,162,768 33
Payable in United States	 995,030 00
Payable in Canada, London and United States	 66.84L378 00
[Stage Direction]
The usual practice is to borrow temporarily from the government and issue securities to the public at the appropriate time and in an amount suitable to the market for refunding and other purposes. Of the $200 million authorized by the 1947 act, the last C.N.R. refunding act, $104,642,000 has been financed by public issues and the remainder by government loans.
I have a second statement which I am sure would be very useful for members to study
before the bill is introduced covering this operation. It has to do with the refunding and calling operations covered by the 1947 act. If the house will give its consent I will put that on the record too.
Mr. Speaker:: Is it the pleasure of the house that the hon. gentleman shall have leave to put this table on Hansard?


Some hon. Members:: Agreed.


James Sinclair: The table is as follows:
Detail of Bond Issues sold to the Public Under the Authority of
The Canadian National Railways Refunding Act, 1947
Issue	Maturity	Interest Price to	Cost to	Total Amount Amount Issued	Date	Date	Rate	Company Company	Issued	for RefundingPer cent	Per cent	Jan. 3, 1949	Jan. 3, 1966 	
3	99-50	3-075	$35,000,000	$8,897,190.85Sept. 15, 1949	Sept. 15, 1969 	
22	98-625	2-96	70,000,000	63,370,883.64Jan. 16, 1950	Jan. 16, 1971 ....	
2|	98-83	2-95	40,000,000	26,373,454.40*June 15,1950	June 15,1975 ....	
23	100-77	2-72	*6,000,000	6,000,000.00$151,000,000	$104,641,528.89
Payable in United States Funds.


Mr. Wright:: I would like to ask a question, but if this is going to committee I can ask it there.


James Sinclair: It is.
Motion agreed to and the house went into committee, Mr. Dion in the chair.


Percy Ellis Wright: What rates of interest did these issues bear, and is it anticipated they can be refunded at the same or lower rates?


James Sinclair: The rates vary, of course. In the last four years all the issues that were callable have been called, as will be seen from this table. Some of them carried interest as high as 4J per cent, and obviously it was good business practice to call those bonds and refund them. The actual refunding which has been done since 1947 has been at a cost to the company in January, 1949, of 3-075 per cent; in September, 1949, 2-96 per cent; in January, 1950, 2-95 per cent and in June, 1950, 2-72 per cent.


James MacKerras Macdonnell: I understand that the basis of calling is what one would expect, purely a calculation of ruling interest rates, those at which they can be refunded. Perhaps we can have a little more discussion of this a little later on.


James Sinclair: That is quite right.
Resolution reported, read the second time and concurred in.
Mr. Fournier, Hull (for Mr. Abbott) thereupon moved for leave to introduce Bill No. 392, respecting the Canadian National Railways, and to provide for the refunding of matured, maturing and callable financial obligations.
Motion agreed to and bill read the first time.



PROVISION TO MEET CERTAIN EXPENDITURES AND GUARANTEE OF SECURITIES AND INDEBTEDNESS

Alphonse Fournier: That it is expedient to bring in a measure to authorize the Canadian National Railway Company to make capital expenditures not exceeding $97,737,000, and to increase the working capital of the national railway system by $20,000,000; to provide that the governor in council may authorize the national railway system to incur commitments during 1951, in addition to the authorized expenditure, in amounts not exceeding $111,512,920; to authorize the national company to issue securities to provide amounts required for the authorized expenditures; to provide that amounts available from reserves for depreciation and debt discount amortization may be applied towards meeting the authorized expenditures; to provide that the aggregate principal amount of securities not including any securities issued to secure temporary loans made by the Minister of Finance, outstanding at any time shall not exceed $101,215,000; to authorize the governor in council to
Canadian National Railways guarantee the principal and interest of the securities issued by the company for the purpose aforesaid; to authorize the Minister of Finance to make temporary loans to the said company secured by such securities and not exceeding $101,215,000 in principal amount to enable the said company to meet such expenditures and indebtedness; with authority to give financial aid and assistance to other companies of the said national system and to authorize the Minister of Finance to place at the disposal of the national company or the Trans-Canada Air Lines, such amounts as may be necessary to enable them to pay operating and income charges if at any time before the first day of July, 1952, the available revenues of the national railway system or the Trans-Canada Air Lines and subsidiaries, respectively, are not sufficient to pay such charges: Provided that all such amounts shall be reimbursed to the minister from the recipients' annual revenues in so far as such revenues are sufficient, any insufficiency to be provided for by subsequent deficit appropriation by parliament.


James MacKerras Macdonnell: Could we have a statement on this?


James Sinclair: This is the annual bill in connection with finances and guarantees for the C.N.R. I would like to have been able to say that it is in the same form as in previous years, because that always helps get the resolution and bill through, but actually this year it is not in quite the same form.
Each year the Minister of Transport (Mr. Chevrier) presents the report of the Canadian National Railways to parliament, and that report is referred to the committee on railways and shipping owned, operated and controlled by the government. At the same time the budget of the C.N.R. for the coming year is discussed by that same committee. This year the committee first met on April 12, it had seven meetings, and presented its final report to parliament on May 1 approving of the capital expenditures of the C.N.R. and the budget for the coming year. This resolution is to implement that report.
Ordinarily this resolution is in three parts. The first part authorizes the C.N.R. to issue securities up to the amount of the approved capital expenditures. It is a growing railway and requires additional capital each year. The second part permits the government to make loans to the C.N.R. against its securities until such time as the company thinks it fit and proper, according to the market, to float an issue. The third part of the ordinary resolution authorizes the government to make advances against the budget of the C.N.R. if their operating revenues are not sufficient to cover the cost of operation. If at the end of the year the operating revenues have not been sufficient, of course that means the C.N.R. has a deficit which is then voted by parliament.	I
4296	HOUSE OF
Canadian National Railways
This year, however, there is one change to which in fairness I must direct the attention of hon. members. That is the provision in the early part of the resolution to increase the working capital of the national system by $20 million, and then the following sentence:
-to provide that the governor in council may authorize the national railway system to incur commitments during 1951, in addition to the authorized expenditure, in amounts not exceeding $111,512,920; to authorize the national company to issue securities to provide amounts required tor the authorized expenditures-
In the last two years I have had to prepare myself in advance on the details of the railway budget, because I am not a member of the committee, but this year I am very glad to have the assistance of my colleague the parliamentary assistant to the Minister of Transport, who will now explain to the house why these two new clauses have been inserted in/ the annual resolution.


Mr. W. M. Benidickson (Parliamentary Assistant to the Minister of Transport):: Probably I should first explain the need for the -additional working capital of $20 million.
I think hon. members will realize that need when I simply mention that the cost of materials and supplies is very much higher than it has been in recent years. Consequently the amount of cash a corporation of this size must have available necessarily must be greater than in previous years. That, of course, is also shown up in the increased revenues and expenditures. It is felt that the present working capital of the road should be increased by $20 million in order that at all times the railway company may meet its obligations as they become due, and may be able to take advantage of trade discounts and such things as are known to all businessmen.
The parliamentary assistant to the Minister of Finance (Mr. Sinclair) has indicated that there is another new feature in this annual resolution. That is the provision this year that the government may authorize the national railway system to incur commitments during 1951 in a sum not to exceed $111,512,920 for orders for equipment that probably should be taken into account this year rather than next year. I would like to give the house a little explanation of why it is felt this step should be taken since, as I say, it is something that has not been a part of similar resolutions in previous years. In view of, first, the current and anticipated restrictions on steel and other materials in short supply; second, the progressively increasing lapse of time between the placing of orders for new equipment and delivery of those orders by 

manufacturers; third, the urgent necessity of replacing obsolete equipment no longer efficient or economical in operation; and fourth, providing additional rolling stock to meet current and expected increases in traffic; the management of the Canadian National Railways considers it essential that 1952 deliveries be assured by placing orders earlier than has been the practice heretofore. Until firm orders are placed no steel can be allotted these days for the manufacture of the equipment that they see will be required in the future.
In addition to the needs of the road for 1952 that are already seen and for which this additional provision should be made now, in April of this year the company felt it advisable to make a detailed study of the equipment requirements for a period as long ahead as five years, and it has recommended that on a five-year basis equipment purchases should normally include the acquisition of 4,360 new freight cars per annum. Of this number some 2,500 will be offsetting annual retirements due to obsolescence and those that have become inefficient and uneconomical in operation. This also includes 1,860 that are expected to accommodate an estimated ten per cent increase in business at the rate of two per cent per annum over the five-year period. Approximately 30 baggage express cars per annum will be needed over this period to provide for average annual retirements, and to bring this class of equipment up to approved passenger train standards.
As to motive power, no exact prediction could be made by management when this decision was made in April, with respect to the number of road and switching units which should be purchased annually between the years 1952 and 1956 inclusive, inasmuch as such purchases would necessarily depend upon the acceleration or deceleration of the over-all dieselization program and the availability of equipment and servicing and repair facilities, as well as upon other factors which are not susceptible of exact calculation at the present time. Taking all these factors into account, it is recommended by C.N.R. management that orders be placed immediately for 24 road diesel locomotives and 25 diesel switching units to constitute the 1952 complement of the five-year program.
As hon. members know, the budget of the Canadian National Railways is annually presented to a committee of this house, namely the committee on railways and shipping. The records of that committee do contain a list of equipment that is included in the 1951 budget of the Canadian National

Railways, so I do not think that needs to be repeated now. With respect to those purchases of equipment wanted in 1952 that it is felt should now be placed in the form of orders, in order that all members of the house may have a full appreciation of what
Canadian National Railways is involved I shall, with the leave of the house, place on Hansard a table showing the list of equipment that it is felt should be ordered now. It will then be available to members when the bill is up for discussion.


Some hon. Members:: Agreed.
Equipment to be Ordered under Commitment Authority in Financing & Guarantee Act, 1951
Total
Units
25 Locomotives-diesel switches
24	Road diesel locomotives ___
25	Diesel switching locomotives
2,550 Gondola cars	
1,000 Automobile cars	
2,160 Box cars	
250 Covered hopper cars	
1,750 Hopper cars	
800 Flat cars	
10 Stock cars	
50 Sleeping cars	
15 Cafe parlour cars	
20 Diners	
30 Baggage express cars	
30 Baggage cars	
1 Dining car-Newfoundland .. 58 Coaches	
22 Section room sleepers	
10 Buffet sleepers	
20 Tourist sleepers	
5 Parlour cars	
5 Buffet parlour cars	
8,860
Can.	U.S.	EstimatedLines	Lines	Cost24	1	$ 2,860,00024	4,800,00020	5	3,120,0002,250	300	18,472,5001,000	7,000,0001,810	350	15,613,720125	125	2,075,0001,250	500	12,575,000800	5,175,00010	55,00050	9,450,00015	2,824,30020	3,836,00030	2,334,00030	2,340,0001	95,00047	11	6,487,40022	4,400,00010	2,000,00020	4,000,0005	1,000,0005	1,000,0007,568	1,292	$111,512,920


James MacKerras Macdonnell: I am
grateful to the two parliamentary assistants for explaining as clearly as they have the difference between this resolution and the resolution which has been more or less routine in the past. When we go into committee of the whole, there are one or two questions 1 should like to ask. At the moment I am not clear how much of these new commitments and obligations were in fact discussed in the committee on railways and shipping when it was in session. That, however, can wait until we are in committee of the whole.
Motion agreed to and the house went into committee, Mr. Dion in the chair.


James MacKerras Macdonnell: First of all, I am looking back now to the resolution of a year ago, and to the budget the railway presented a year ago. At that time the capital budget of the railway was set out at $24 million, and the authority requested was for the same figure. In looking at the relevant figures before the committee this year, the one is $40 million and yet the figure we have in this resolution is not $40 million, following the practice of a year ago, but $97 million. May I have that point explained first?


William Moore Benidickson: The item of $97 million is made up of new equipment totalling $54,702,823; miscellaneous equipment, $1,853,897; the acquisition of securities, which was explained to the committee, totalling $3,712,000; additions and betterments, $37,302,823. All of these items, of course, are items taken directly from the 1951 budget figures which were presented to the committee on railways and shipping. There is no change in any of the figures that were presented to that committee.


James Sinclair: The other point raised by the hon. member concerns the difference between the 1950 resolution and this resolution. First of all the resolution speaks of $97 million capital expenditures and then $20 million working capital. At the bottom of the resolution the government is authorized to extend temporary loans to the railway up to only $101 million. In last year's resolution these two amounts were the same. Last year we had a long discussion on the position of the company concerning depreciation allowance and debt amortization charges which could be used as cash to purchase equipment.


James MacKerras Macdonnell: They are going to be used this time.
4298	HOUSE OF
Canadian National Railways


James Sinclair: Actually, what could have happened last year, for example, is that the $24 million was authorized for bond issue of the Canadian National and the government permitted to make temporary loans up to the amount, until the railway floated its bond issues; but that latter guarantee could have had added to it the cash available through the depreciation account and the amortization account. It was because of the comments of members last year that the Department of Justice redrafted this section to show that of the $117,737,000 covered by these first two items at the beginning of the resolution the government could only make temporary advances of up to $101,215,000, the balance being covered by those two items of depreciation and amortization.
Now, if the committee would like to have on the record the two calculations of the reserve of depreciation and the debt amortization available, I could put them on Hansard very easily. I could read it into the record, although it would be dull, or I could simply place it on Hansard if the committee agrees.


James MacKerras Macdonnell: I am still left with one question unanswered. I realize that the parliamentary assistant to the Minister of Transport has explained these other items. He has said something about which I was not sure before, that these other items were in fact mentioned in the railway committee. What is not yet clear to me is that a budget was put before the committee in due form, as it was a year ago. A year ago we approved a capital budget of $24 million and we subsequently authorized the same amount. This time, following the same practice so far as I know, we approve a budget of $40 million but we are now faced with a request for authorization of $97 million. The parliamentary assistant to the Minister of Transport says he has given the other items. What I want to know is, either what was before the committee was a budget or it was not a budget. I want to know where it leaves the committee.
These committees are either considering and recommending budgets, or they are not. So far as I can see here, subject to what may be said, we approved $40 million and we now find ourselves faced with $97 million. I believe that is qualified to the extent that we have inserted in here definite authorization to use the depreciation and amortization. That qualifies the figure, but it does not make the difference between $40 million and $97 million.


William Moore Benidickson: Would the hon. member tell me from what source he is quoting the $40 million?


James MacKerras Macdonnell: Yes, I am quoting the report of the committee on railways and shipping, page 136, showing a summary of financial requirements for the year 1951, which also includes 1950. I assume that, when I found the figure of $24 million for 1950 was the figure which was used in the resolution, I would find the $40 million figure, the corresponding figure in this statement, used in the same way. The explanations which have been given as to the difference in the other points of the resolution, I understand, and I think they are intelligible; but I still do not understand this one. The parliamentary assistant sought to explain it by mentioning certain figures which made up the difference between the $40 million and the $97 million. But I still come back to the point that we approved a budget in that committee; and if I am right in thinking that it was a $40 million budget, and that we now have this huge larger amount, it makes me wonder how much the meetings of our committee really meant. This matter can wait over, if the parliamentary assistant prefers that it should, until we have the bill before us. There is no need to delay matters now.


William Moore Benidickson: Yes, that can be done, and I will take note of the hon. member's question. But I think he will note from page 136 that my figures are all there. It is just a matter of using them in a different way. The requirements for additions and betterments, new equipment, and acquisition of securities is set out on page 136 of the railways and shipping committee at $56,737,000. We are making no change in practice in the matter of using such moneys as are available from reserve for depreciation and discount amortization, which amount to $16,522,000. That means that with respect to these things we would require normally in cash $40,215,000. That is perfectly correct. But later on we will explain to the hon. member that there will be a departure from last year's practice in that formerly we have shown-a net figure -a figure that eliminates from gross C.N.R. requirements such sums as the road itself is able to finance as a result of selling equipment trust shares. That is a practice which was explained to the railways and shipping committee. It is felt that, in view of the unfavourable market conditions for raising money in that form at the present time, one should not count on that being a source of finance. Consequently, in this bill parliament will be asked to provide finance and securities for the entire amount of the capital requirements of the road.


James MacKerras Macdonnell: I am not
going to pursue the matter further; I am not

.going to disagree with that statement. I am only reverting to what I said, namely, that on the face of it, it is no answer to refer me to the figure of $56 million because there is a corresponding figure to that in 1950. We can leave the matter now, however, until we get to the second reading stage.


Gordon Knapman Fraser: Does the parliamentary assistant mean that they are going to stockpile a little bit more this year? Is that the idea?


William Moore Benidickson: No, Mr. Chairman. As I think the hon. member will find, when he has time to read the statement that I have given, it is not a matter of stockpiling. It is a matter of necessity, of the requirement to place an order earlier these days than was necessary last year, owing not only to steel rationing and so on but to the general pressure on supplies of the kind that would be wanted by the road in 1952. We must place orders now which normally might have been placed, we will say, at the beginning of
1952.


Gordon Knapman Fraser: And this revolving fund that we have will not look after the matter. Is that the idea?


William Moore Benidickson: I do not see the point respecting a revolving fund. We are not dealing with money. We are dealing with placing orders for equipment. It is hoped that, by placing orders now, this equipment that would be required in 1952 will be delivered in 1952. But if conditions worsen, of course we would not even get delivery in 1952. But the situation emphasizes the need of planning for a longer period ahead than has been the custom.


James MacKerras Macdonnell: By the use
of the word "commitments", I take it that it is intended to indicate that it will be an obligation, not an expenditure?


William Moore Benidickson: That is correct. It is not expected that much, if any, of this equipment would be delivered in 1951; but it should be ordered now in order to assure that it would arrive some time in 1952.


Gordon Knapman Fraser: That will tie up steel a little bit more, will it?


James MacKerras Macdonnell: I understand all that. But I should like to add this comment to what I said before. When we get to the second reading stage, I hope that we can get a figure that is as specific as possible with regard to commitments and that we may be told whether any of them are likely to develop into expenditures.
Resolution reported, read the second time and concurred in.
19, 1951
Ming Sung Industrial Company
Mr. Fournier, Hull (for Mr. Abboit) thereupon moved for leave to introduce Bill No. 393, to authorize the provision of moneys to meet certain capital expenditures made and capital indebtedness incurred by the Canadian National Railways system during the calendar year 1951, and to authorize the guarantee by His Majesty of certain securities to be issued by the Canadian National Railway Company.
Motion agreed to and bill read the first time.


Alphonse Fournier: that the house go into committee of supply.



MING SUNG INDUSTRIAL COMPANY

George Alexander Drew: Mr. Speaker, I propose to avail myself of the opportunity afforded by this motion to raise a subject which I think should be dealt with by this house without further delay. I think the facts have been adequately ascertained to call for a decision by the house, regardless of party, that action should be taken to prevent the possibility of any abuse of the privileges accorded to the Canadian flag in the ports of the world and in the shipping lanes between those ports. I propose to introduce a motion which will ask for an expression of opinion from this house in regard to this subject.
When the matter was before us earlier, we were dealing with it by a process of question and answer. During the course of those answers considerable information was obtained, but further information is available; and I am going to submit to the house what I regard as facts sufficiently convincing to call for action without any further inquiry being necessary. This matter is of sufficient importance to call for a review of the essential facts.
The whole transaction has its beginning in the arrangements that were made for the manufacture in Canada of nine vessels to be delivered to a Chinese company known as the Ming Sung Industrial Company Limited. That company is a large Chinese shipping company with head office in Chungking, and with branches throughout China in the larger cities. It has been in operation for a long time. That company sought to acquire Canadian-built vessels for its business. At the time that these contracts were entered into, there were certain government powers which made it possible for the government to make special provision for the manufacture of these ships.

Ming Sung Industrial Company
The contracts were given to three shipping companies, all of them well known companies, which in due course completed the contracts, and the ships were delivered. On November 12, 1946, the Canadian government, by P.C. 4690, provided, under the provisions of the Export Credits Insurance Act, that Canada should give a guarantee in an amount not to exceed $12,750,000, which would provide a blanket guarantee of payment of the money required for this purpose, which money was to be advanced by the Imperial Bank of Canada, the Bank of Toronto and the Dominion Bank.
The government in China of that time joined in the guarantee; but, as is generally known, the situation has changed since that time to a point where the government of Canada obviously is called upon to accept the full, or practically the full, responsibility for this payment. Certain security was given in the form of mortgages on the ships by the companies.
On May 16,	1950, order in council
P.C. 4690 was amended by P.C. 2453. By that time the banks had each advanced one-third of the total amount required. The order in council passed on May 16, 1950, included this paragraph:
That since the date of the execution of the said supplementary agreement, the Chinese company has proposed that it will sell and transfer to Ming Sung Industrial Company of Canada Limited, a company incorporated under the Companies Act (Canada), hereinafter called "the Canadian company", seven of the said ships or vessels (now said to be in or near Hong Kong) and that they shall then be transferred to Canadian registry under the Canada Shipping Act and that the Canadian company shall execute and deliver a mortgage or mortgages thereof in form registrable in Canada in favour of the Chinese company for the amount of the purchase price, namely, $12,750,000, payable as to principal and interest thereon at the same times, in the same instalments and at the same rate of interest as the Chinese company's indebtedness to the said banks is payable as aforesaid, and that said mortgage or mortgages shall thereupon be assigned by the Chinese company to the said banks as additional security for the said indebtedness.
In that way the Ming Sung Industrial Company of Canada Limited, a Canadian subsidiary of the Chinese company, whose head office and whose main operations were then inside communist China, became the owner of the ships; and in the process of becoming owner by this order in council was to receive Canadian registry for these seven ships. That, as we have been informed, has led to the operation of these ships from Hong Kong to Macao and Canton under the Canadian flag, with the ships carrying the Canadian flag painted on the side


Under the Canada Shipping Act there are of course certain requirements as to the qualifications of the master of the ship, and as to the qualifications and identity of the crew, as well as the nature of the operations. Section 133A of the Canada Shipping Act does include a provision which makes it possible to vary the requirements of the Canada Shipping Act which would ordinarily apply.
There is no question whatever that these ships could not have operated under the Canadian flag and with Canadian registry unless they had had exemption from the Canada Shipping Act,, because the operations of these ships and the crews of these ships did not conform with the Canada Shipping Act.
Section 133A was an amendment to the Canada Shipping Act which became law on June 30, 1948. It reads as follows:
(1)	The minister may, if he thinks fit, and upon such conditions, if any, as he thinks proper to impose, exempt any ship from any requirement contained in sections 113, 114, 132 and 133, or dispense with the observance of any such requirement in the case of any ship, if he is satisfied that that requirement has been substantially complied with in the case of that ship, or that compliance with the requirement is unnecessary in the circumstances of the case, and that the action taken or provision made as respects the subject matter of the requirement in the case of the ship is as effective as actual compliance with the requirement.
(2)	The minister shall annually lay before parliament a special report stating the cases in which he has exercised his power under this section during the preceding year, and the grounds upon which he has acted in each case.
That is the quotation that I am reading into the record. According to the statement of the Minister of Transport (Mr. Chevrier), which he made in this house on Friday, June 15, it now appears that in March of last year these seven ships were exempted by the Minister of Transport after authority was given to him by what he called a directive of the cabinet. On this point the Minister of Transport had this to say, as reported at pages 4188 and 4189 of Hansard:
Now then, the leader of the opposition says, "Produce the directive." I will have to inquire whether or not a written directive was given. I have no recollection of whether it was or not. I do know this, that repeatedly matters are discussed in cabinet and advice is sought from them-"Here is a matter in which I require advice." A discussion follows and advice is given.
There was no order in council, so far as I could ascertain in the few minutes that were at my disposal this afternoon-about twenty-five minutes. There was no order in council given. There was approval given. And so far as I can recollect- and I might be mistaken; I might have to take

it back-but so far as I can recollect there was no written directive. Approval was sought and approval was granted.
That being so, there was an oral directive that exemption be granted. And acting under that advice, and with the concurrence of my colleagues in the cabinet, I issued the exemption under 133A.
I shall not comment further at the moment in regard to the most interesting fact that so important a directive was made orally and that we therefore have on the record, so far as is now available to us at any rate and subject to any subsequent correction offered by the Minister of Transport, this important exemption without any written evidence of the circumstances under which it was made and the reasons why such an exemption should be given.
The Minister of Transport says that the last paragraph of the section I have just read means that he can table in parliament at any time during this present year a report as to the exemptions made. The minister indicated that he had not tabled any report on this exemption and he indicated also that there was nothing unusual in that because he would have the balance of the year in which to table such a report. However, we all know that as a matter of administrative procedure things of this kind are
Ming Sung Industrial Company checked carefully by competent departmental officials and it does seem surprising, to say the least, that we should be near the end of this session without any statement which would explain so important and so unusual an exemption as this particular exemption. We had every reason to believe that this session would be a full, regular session when it began.
When I say "so unusual" I do so having regard to the nature of the exemptions that are usually made. There is a most interesting fact in connection with this. A report of the exemptions was tabled by the minister during the present session. Sessional paper 124A-2, tabled Thursday, February 1, 1951, is headed as follows: "Report of exemptions authorized by the Minister of Transport under section 133A, Canada Shipping Act, 1934, as amended". That gives a list of the exemptions approved by the minister under section 133A of the Canada Shipping Act, which I have just referred to and read. In order to indicate the nature of the exemptions that were approved under this section I should like to read the first one for January, for February, for March and for April, which are as follows:
Date	Name of Ship	Relaxation	ReasonJanuary 13, 1950 	Gulfport 	Ship permitted to clear for voyage with 2nd mate holding inferior certificate.	Voyage just outside H.T. limits for which properly certificated 2nd mate not available.February 27, 1950 	General Bur stall 	Ship permitted to clear with master holding inferior certificate.	To avoid interruption of Newfoundland coasting vessels-pending obtaining of certificates.March 14, 1950 	Theron 	Ship permitted to clear with uncertificated master.	No master available with required certificate and experience.April 25, 1950 	Mont Royal 	Ship permitted to clear with master holding inferior certificate.	No master available with required certificate and experience.
So it goes right through the whole year. I point out that this is not a report just for the first few months; it is a report which starts in January and ends in December. The interesting thing is that nowhere in this report is to be found this particular relaxation or any reference to the exemption made under section 133A of the Canada Shipping Act.
I think hon. members of this house might well ask why it was that a report tabled in accordance with section 133A and covering the whole year from January to December should include all these other exemptions
and make no reference to this particular exemption which had such special and important consequences.
There is also the fact that this is an exemption of a very different nature. This exemption has much wider consequences than those relating simply to the qualifications of masters, mates or others called upon to work on these ships. We have been told also that there are export permit regulations involved in this matter, and that such regulations relate to the type of export which may be made to certain countries.

Ming Sung Industrial Company
On page 16 of the published copy of the export permit regulations issued by the Department of Trade and Commerce appears a list which indicates that Hong Kong and Macao are both included in the areas under control. Apparently Macao is still on the blacklist. We are told that some measure of protection is assured that there will not be an improper carrying on of trade from Hong Kong because an export certificate must be granted by the authorities in Hong Kong which we are to assume would accord with the general agreements which have been entered into; but it must be remembered that the British authorities in Hong Kong are concerned primarily with British trade and the observance of British law and are certainly not concerned primarily with Canadian trade and the enforcement of Canadian law.
In so far as we might look to the British government for assurance that they are satisfied with the trade, perhaps it might be a matter of interest that only today an Associated Press dispatch from London refers to an announcement made in the British House of Commons relating to a Hong Kong dispatch reading as follows:
Britain announced today she is taking steps to block all shipments of strategic goods to red China through the crown colony of Hong Kong. Sir Hartley Shawcross, president of the board of trade, said all exports from the United Kingdom to Hong Kong and China will go under licensing control next Tuesday. No licences will be granted for goods which in the present circumstances could be of strategic and military importance. Shawcross made the announcement in the House of Commons. Britain previously banned the export of rubber to communist China.
The very fact that this statement was made in the House of Commons in London today indicates that the British government itself is not satisfied with the measure of control on shipping in and out of Hong Kong. In any event that does not answer the question with respect to Macao. Macao, which is a Portuguese possession, does not offer any security similar to that which may be offered by Hong Kong, whether or not we are entirely satisfied with that measure of protection. In these discussions it seems to me that what should be borne in mind is that it should not be necessary for us to wait to have it proved to us that contraband or war materiel, whether it be arms or simply supplies that will assist communist China, is going to a nation which at the present time is sending armed men to fight against young *Canadians in Korea. Whether or not it can be proved that that is so, if the possibility is there we should stop it, and we should .stop it without delay. It can be stopped by

the simple process of withdrawing the exemption which has been accorded to these ships operated by a company masquerading under a Canadian charter.
When this subject was discussed in the house on Thursday last, in response to a statement by the hon. member for Nanaimo (Mr. Pearkes), who introduced this subject as the result of a message he had received from Hong Kong, the Minister of Trade and Commerce (Mr. Howe) said, as reported at page 4124 of Hansard:
The ships were sold in the ordinary way through a commercial transaction, and the ships passed to the flag of China, subject to a mortgage held by the Canadian shipyard and deposited with the bank that lent the money.
The minister went on to say that all went well until the Chiang Kai-shek government fell, when the banks began to worry. He said that happily the loans were not in default but he added: "The government is not happy about it." The Minister of Trade and Commerce said that the ships were sold in the ordinary way through a commercial transaction. This does not seem to be an ordinary transaction. In the ordinary course of events someone who buys something pays for it or at least pays something down. Most of us would like to find some device by which it would be possible to buy the things that we require without paying anything down.


Clarence Decatur Howe: May I call my hon. friend's attention to the fact that the Chinese government paid 15 per cent of the cost of the ships in United States dollars.


George Alexander Drew: That is-


Clarence Decatur Howe: The Ming Sung company paid 15 per cent of the cost of the ships to the shipyard, payment being made in United States dollars.


George Alexander Drew: Was that paid by the Ming Sung company or the Chinese government?


Clarence Decatur Howe: The Ming Sung company.


George Alexander Drew: I understood from the record that is was the Chinese government.


Clarence Decatur Howe: It was the Ming Sung company that paid the cash.


George Alexander Drew: Then according to the minister 15 per cent was paid by the Ming Sung company at a time when the Minister of Finance (Mr. Abbott) is insisting on our people paying a much larger sum-


Douglas Charles Abbott: This was not at that time.


George Alexander Drew: I recognize that, nor were these Canadian purchasers.


Douglas Charles Abbott: We also sold to France and some other countries.


George Alexander Drew: At any rate the Canadian
government guaranteed this loan and the banks, acting in their ordinary capacity as banks, simply carried out a regular transaction with a government guarantee. The banks advanced the money required to complete this purchase. Nine of these ships were delivered. They were not all of the same type. Some of them were specially made Yangtze river boats which are specially designed to operate in the shallower waters of the Yangtze river. The others were regular cargo vessels, and of course these cargo vessels would seek to do business in other waters. Apparently the Yangtze boats are able to operate to Hong Kong, or so it would appear because in the publication issued by the Department of Trade and Commerce known as "Foreign Trade", under date of June 16, 1951, there is this news report:
Hong Kong-Canton passenger service resumed.
Hong Kong, June 1, 1951.- (FTS)-On May 21, ;he S.S. Chien Men, a Canadian built river vessel belonging to the Ming Sung Industrial Company, departed on the first trip signalling the resumption of regular passenger service between Hong Kong and Canton. Although the Ming Sung vessels have been running a weekly service to Canton via Macao, and ferrying Malayan-Chinese repatriates to the mainland, for several months, this sailing of the Chien Men marked the first resumption of direct scheduled Hong Kong-Canton service since the latter port was occupied by the Chinese communists almost two years ago. The new service will operate three times a week, leaving Hong Kong every Monday, Wednesday and Friday.
That raises two points. One is the arrangements under which the Chien Men, under Canadian registry, is able to operate satisfactorily into a communist controlled port. The other is what is meant by the reference to the repatriation of Malayan-Chinese to the mainland. So far as I know, the only mainland to which these repatriates could be delivered is the mainland of communist China. I think the house should be informed whether this is taking place under some agreement with the international Red Cross, whether it is the repatriation of wounded prisoners of war, or whether this is a restoration to Chinese soil of those who were engaged in any activity which left them outside their home lands. Ordinarily it is essential that there be very exact information as to the reason for affording safe conduct to people back to a soil from which armed men come to engage in battling those who go from Canada to the battle line on which the people of both these nations are now engaged.
When the minister says that this was an ordinary transaction, he no doubt has
Ming Sung Industrial Company reference to its being an ordinary transaction of the nature that is carried out when the government has full and arbitrary, powers which 'are exercised without the ordinary supervision of parliament. He also doubtless refers to the sort of things that could be done under emergency legislation, because these contracts were carried out under the special authority given the government at that time.
This contract was carried out by highly reputable companies; but one company did raise a special problem. That was George T. Davie and Sons Limited of Levis, Quebec, which had been operating for some time. Unfortunately the president, Mr. Davie, met his death in a tragic automobile accident. It then became necessary for the government to intervene, and the Canadian Commercial Corporation had some responsibilities in that regard. In that connection I might say this company was shown to have been incorporated on November 26, 1941, with an authorized capital of 2,500 shares. The president was Andre Delagrave of Quebec city; the secretary was Maurice Paquet of Lauzon; a director was Brenda Delagrave of Quebec city, and the solicitors were St. Laurent, Gagne and Tasehereau of Quebec city. This company continued to operate and was the subject of the special arrangements, which have not yet been fully disclosed, through the agency of the Canadian Commercial Corporation. As a result of the combined activities that were carried out, the contracts were fulfilled.
The next important stage in these proceedings after these ships were delivered follows as a result of the occupation of the Chinese mainland by the communist government which is now in power. As a result of that an application was made for the incorporation of the Ming Sung Industrial Company of Canada Limited, which company was incorporated on March 13, 1950. I have not the permanent board of directors, but the provisional board of directors are shown in the record; and the solicitors filing the application were Duquet and MacKay of Montreal. That company was organized to take over the ownership of these ships now operating in the China sea, from Hong Kong to Macao to Canton, in the circumstances indicated.
An interesting point is that the head office of the company is shown as Charlottetown. However, inquiry by telephone in Charlottetown produced the report that the telephone company has not heard of this company, which has no telephone number there. What operations are being carried on in Canada by the Ming Sung Industrial Company of Canada

Ming Sung Industrial Company
Limited of course are not yet disclosed, other than the operation of these ships in that area. Another' interesting point is that when an inquiry was made as to the activities of the Ming Sung Industrial Company of Canada Limited, apparently it was necessary to direct that inquiry to Hong Kong. While this is a Canadian company, evidently that was the place where the information could be obtained. And the information obtained there, such as it was, came from another subsidiary, the Ming Sung Industrial Company of Hong Kong Limited. So we see this combined picture of the company operating in communist China: the Ming Sung Industrial Company of Hong Kong Limited and the Ming Sung Industrial Company of Canada Limited, both taking the best possible advantage of the best of all possible worlds. Undoubtedly this is a very satisfactory transaction from the point of view of the company operating in the communist area and the company operating in Hong Kong and the company which has the advantage of a Canadian flag and exemption from the ordinary provisions of Canadian law.
Then when we come to the directorate of the Ming Sung Industrial Company of Canada Limited, these are the officers, though I certainly do not guarantee the pronunciation: Directors, Tso-Fu Lu, Hong Kong; Tomas S. J. Wang, Montreal; Chen-Chi Yang, Hong Kong; Shong-Sung Tong, Hong Kong; Y. C. James Yen, New York; R. G. Peers, Montreal, vice-president; R. D. MacKay, Montreal, secretary-treasurer. This is the company which now operates the service that has been -described.
Undoubtedly it would be a matter of interest to learn whether the statements contained in the message received by the hon. member for Nanaimo (Mr. Pearkes) had yet been fully checked. I submit that the only statements contained in the letter which came from Hong Kong and which has been placed before this house which have not been fully proved are, first, the statement that there is a Russian captain in charge of one ship and, second, that munitions of war are being carried. It has been agreed by the government that this change of registry did take place last spring. The government have stated that they are aware trade is going on with Macao; and it is very interesting that the trade with Macao apparently began just after the Korean hostilities opened. At that time, of course, there would be obvious reasons which need not be explored, since they are self-explanatory, why certain facilities would be afforded at Macao which might not be available at Hong Kong, no matter how wide open the provisions were there at that time, .and the provisions were sufficiently wide

open to call for criticism in the British House of Commons. That criticism has continued and has led to the announcement in London today by Sir Hartley Shawcross to which I have just referred. The government was fully informed in regard to the details of this transaction and in regard to the change of registry. There is an order in council dated Tuesday, May 16, 1950, which fully sets out the original arrangements for the construction of the ships, the advance of the money by the banks, the terms under which repayment was to be guaranteed, and also the setting up of the Ming Sung Industrial Company of Canada Limited. So the setting up of this Canadian subsidiary of the company which operates in communist China was not merely an ordinary commercial operation; it was fully approved and recognized, by the government in that order in council. I would suggest, Mr. Speaker, that instead of reading this order in council to the house in full it be placed on Hansard associated with today's recorded debate. Otherwise I shall be called upon to read it in full, since it sets forth the full details of this transaction.


Louis Stephen St-Laurent: It was tabled at the time.


George Alexander Drew: I realize it was tabled, but there is a vast difference between tabling it and having it on the record in the context so that those who are seeking to follow the context may know what is in it. I am not questioning the propriety or the impropriety of tabling it. That act makes the information available, but it does not carry the information in a way that entry on Hansard does. If it is agreeable, I shall put it on Hansard.


Some hon. Members:: Agreed.


George Alexander Drew: The text of the order in council follows:



P.C. 2453

[Stage Direction]
At the Government House at Ottawa
Tuesday, the 16th day of May, 1950 Present:
His Excellency
The Governor General In Council:
Whereas order in council P.C. 4690 of 12th November, 1946, made under the authority of section 22A of part II of the Export Credits Insurance Act, authorized the Minister of Finance on behalf of the government of Canada to give the guarantee requested by the government of the republic of China, as therein set out, of (a) the guarantee of the government of the republic of China of the payment by Ming Sung Industrial Co. Ltd. (hereinafter called "the Chinese company") of the cost of Canadian produced goods to be purchased by the Chinese company from exporters and the cost of Canadian services to be supplied to it to a maximum amount of $12,750,000 in lawful money of Canada to be advanced by Imperial Bank of Canada, the Bank of Toronto, and the Dominion Bank pursuant and subject to an agreement dated 30th day of October, 1946, between the

Chinese company and the said banks, and (b) the securities given by the Chinese company for repayment of the said amounts so to be advanced pursuant to said agreement;
And whereas pursuant to the said order in council the Minister of Finance did duly execute on behalf of His Majesty a guarantee in writing dated the 13th day of November, 1946 in the form so requested and authorized, a true copy of which is hereto annexed as schedule "A";
And whereas pursuant to and in accordance with the terms of the said agreement dated the 30th day of October, 1946, the said banks did each advance to the Chinese company the sum of $4,250,000, the said advances together totalling $12,750,000, the amount so guaranteed pursuant to the said order in council, which advances are repayable in accordance with said agreement in ten equal instalments on the 30th day of June in each of the years 1951 to 1961 inclusive with interest thereon at the rate of three per cent per annum payable on the last days of March, June, September and December in each year, which interest has been paid by the Chinese company up to and including the 31st day of March 1950;
And whereas the said agreement of 30th October 1946 contained a provision that in respect of the said advances and as a condition thereof and as additional security therefor, the Minister of Finance might require that the Chinese company execute and deliver to the said banks forms of assignment and hypothecation to be prescribed by the said minister of all the Chinese company's right, title and interest in or to any related contract specified by the said minister;
And whereas in pursuance of such requirement by the Minister of Finance and in the form prescribed by him, the Chinese company did by three instruments, duly executed and delivered by it and each dated the 5th day of May 1947, hereinafter called "the assignments", assign, hypothecate and pledge to the said banks as additional security for their said advances all right, title and interest of the Chinese company in or to certain contracts specified by the Minister of Finance between the Chinese company and Canadian contractors, namely, Geo. T. Davie & Sons Ltd. and St. Lawrence Metal and Marine Works Inc., for the construction and equipment of nine ships or vessels, and the said ships or vessels and all equipment, stores, material, parts, tools and furnishings in connection therewith;
And whereas the Minister of Finance reports that it is expedient in the interests of the government of Canada as guarantor under its guarantee aforesaid that the Chinese company and the said banks should enter into a supplementary agreement with reference to the said ships and vessels in the form hereto annexed as schedule "B", which has been executed as of the 10th day of March 1950 by the Chinese company and the said banks but has not been delivered and is held in escrow pending approval thereof by the governor in council; and
That since the date of the execution of the said supplementary agreement, the Chinese company has proposed that it will sell and transfer to Ming Sung Industrial Company of Canada Limited, a company incorporated under the Companies Act (Canada), hereinafter called "the Canadian company", seven of the said ships or vessels (now said to be in or near Hong Kong) and that they shall then be transferred to Canadian registry under the Canada Shipping Act and that the Canadian company shall execute and deliver a mortgage or mortgages thereof in form registrable in Canada in favour of the Chinese company for the amount of the purchase price, namely, $12,750,000 payable
Ming Sung Industrial Company as to principal and interest thereon at the same times, in the same instalments and at the same rate of interest as the Chinese company's indebtedness to the said banks is payable as aforesaid, and that said mortgage or mortgages shall thereupon be assigned by the Chinese company to the said banks as additional security for the said indebtedness;
Therefore, His Excellency the Governor General in council, on the recommendation of the Minister of Finance, is pleased to order and doth hereby order as follows:
1.	The said supplementary agreement dated as of the 10th day of March 1950 between the said banks and the Chinese company in the form hereto annexed as schedule "B" is hereby approved and the execution and delivery thereof by Imperial Bank of Canada, the Bank of Toronto and the Dominion Bank is hereby authorized and requested without prejudice to, or in any way affecting, the rights of the said banks or any of them under the guarantee of the government of Canada dated the 13th day of November 1946, schedule "A" hereto.
2.	The said banks are further authorized upon the request in writing of the Minister of Finance to take from the Chinese company assignments of mortgages made or given to it by the Canadian company upon any of the said ships and to release or discharge any mortgage or mortgages so assigned upon the same terms and conditions as are set out in paragraph 3 of the said supplementary agreement, schedule "B" hereto, with respect to mortgages to be executed by the Chinese company in favour of the said banks.
3.	Nothing done or purported to be done by the said banks or any of them in pursuance of the said supplementary agreement, schedule "B" hereto, or of this order, including, without limiting the generality of the foregoing, the taking, releasing or discharging of any mortgage or mortgages of any ships or vessels referred to in the said supplementary agreement, whether such mortgage or mortgages is or are made and given by the Chinese company to the banks or their nominee or is or are made and given by the Canadian company to the Chinese company and thereafter assigned to the banks or their nominee, shall prejudice or in any way affect the rights of the said banks or any of them under the said guarantee of the government of Canada.
4.	In so far as the said guarantee of the government of Canada is concerned, the said banks or any of them shall be under no obligation to take any steps or proceedings to perfect, enforce, or realize upon the security of, any such mortgage or mortgages given or assigned to them or their nominee as aforesaid. If the said banks or any of them at the request of the Minister of Finance shall take any such steps or proceedings, the said minister is hereby authorized to agree to indemnify the said banks or any of them against all loss, costs, damages and expenses sustained or incurred by them or any of them in connection therewith.

[Stage Direction]
Assistant Clerk of the Privy Council
The text of this order in council indicates that the government contemplated the transfer of these ships to the Ming Sung Industrial Company. I shall read a short extract from part of it to indicate the knowledge of the government at that time. It reads:
since the date of the execution of the said supplementary agreement, the Chinese company has proposed that it will sell and transfer to Ming Sung
[Stage Direction]
Ming Sung Industrial Company Industrial Company of Canada Limited, a company incorporated under the Companies Act (Canada), hereinafter called "the Canadian company," seven of the said ships or vessels (now said to be in or near Hong Kong) and that they shall then be transferred to Canadian registry under the Canada Shipping Act and that the Canadian company shall execute and deliver a mortgage or mortgages thereof in form registerable in Canada in favour of the Chinese company for the amount of the purchase price, namely, $12,750,000 . . ,
That is all I intend to quote at that point. It will be seen that by this order in council the government not only indicated its acceptance of the Ming Sung Industrial Company of Canada Limited as the company to which these ships were to be transferred by a Chinese company operating in communist China, but in that very order in council it also provided for the registration of these ships under Canadian registry.
We then have this situation confronting us. The ships were sold. They were operated by the Ming Sung Industrial Company Limited, with head offices in communist China. It obviously became impractical for that company to operate these ships in waters where such naval vessels as were posted by the government of Chiang Kai-shek were operating, and whatever the purpose was, protection to operate in that area was accorded these ships by this transfer to Canadian registry and the transfer to a Canadian company with head offices in Charlottetown. These ships are not operating .under Canadian masters, nor are they operating under masters who are British subjects. They are operating with Chinese crews, and they are operating into a communist controlled port. They are operating out of Hong Kong into Macao. The invitation of the Ming Sung Industrial Company of Hong Kong to examine the manifestos of these ships is meaningless as any evidence of security, because those ships can go to Macao, unload everything they have and then take on board a load of contraband which could be delivered to communist China.
I urge, Mr. Speaker, that when these facts are presented it shall not be suggested there is any implication that this government was consciously aiding an enemy in the receipt of supplies. On the other hand, we must examine the facts as they are. I submit that the unchallenged facts, completely ignoring the question as to whether there is a Russian captain-I must say that I do not know that a Chinese communist is any better than a Russian communist-the fact remains that the evidence is clear, with what we already know, that these ships have been accorded special privileges which would make it possible for them to carry materials that would assist the enemy, at a time when that enemy

is sending its troops to fight our troops in Korea. I am not splitting words. I say "the enemy". The Chinese who are firing rifles and artillery weapons and manning the aircraft, if they are, which are attacking our men in Korea today, are Chinese sent by the Chinese government. We must act with full recognition of the reality of that grim truth.
Recognizing that truth, and with the sordid history of trading with the enemy under disguises of various kinds in the past, I suggest that this house would simply be carrying out the obvious course dictated by common sense and respect for the dignity of our flag if the special exemption accorded by this government to the Ming Sung Company and those ships were immediately withdrawn. For the reasons I have stated, and so that the house may be in a position to indicate its views simply related to that one act, which would be fully effective, I am presenting a resolution calling for the withdrawal of that exemption. In case anyone may say: But that deals only with the exemptions, may I point out that immediately the exemption is withdrawn these ships cannot operate any longer under the Canadian flag. The resolution is therefore drawn with a recognition of that fact.
I move, seconded by the hon. member for Nanaimo (Mr. Pearkes):
That all the words after "that" to the end of the question be deleted and the following substituted therefor:
this house is of the opinion that the exemption granted under section 133A of the Canada Shipping Act by the Minister of Transport on May 12, 1950, to the seven ships or vessels owned by the Ming Sung Industrial Company of Canada Limited and registered under the Canada Shipping Act should be immediately withdrawn.
Louis Stephen St-Laurent: I believe that this is at least the
fourth occasion, Mr. Speaker, when this matter of the operation of these ships built in Canada, and still of Canadian registry but now operating out of Hong Kong, has been discussed. I quite appreciate the interest hon. members have in the assertions that were contained in a circular letter addressed by a gentleman from Hong Kong on June 4 to certain members of this house, and to certain newspapers. We had heard from our trade commissioner that this letter was coming forward, and before the matter came up here I can give the house the assurance that I was as much concerned as any hon. member of this house has been since the matter was raised here.
I do not think it would be boasting for me to assert that I would deprecate as much as any person in this house anything that could

render more difficult the task of those brave young Canadians who are supporting the cause of the United Nations in Korea at this time, and who are having such distinguished, if you will, but dangerous military operations to conduct against personnel, including large numbers of Chinese soldiers, who are there, without its being possible to cast the least doubt upon it, with the authority of the present government of the mainland of China. Because this charge was a serious matter and was so regarded, it was gone into extremely carefully. I should now like to make a rather full statement of the manner in which the whole incident has arisen.
It will be remembered'-and I do not think I will be contradicting any of the facts asserted by the leader of the opposition (Mr. Drew), although I think they will perhaps appear in a somewhat different light when the circumstances are taken into account- it will be remembered that these ships were a part of a certain number of ships that were being built here in Canada for foreign purchasers immediately after the cessation of hostilities. It will also be remembered that there was great anxiety in many quarters in Canada about the possibility of serious unemployment developing here after the cessation of the activities that had been so magnificent, so outstanding, during the war production period. At that time parliament, on the recommendation of the government of which I was a member, authorized loans to foreign governments for the purpose of enabling them to place contracts with Canadian firms. Some of those contracts were placed with firms in Canada, one of the firms being this firm at Lauzon, George T. Davie & Sons, Ltd., to which the hon. member referred as having at the time as its president one Andre Delagrave. The hon. member perhaps did not know that Andre Delagrave was the brother-in-law of the late Mr. Davie who had died in this automobile accident, and that he took that position in order to protect the interests of the Davie family. The lady mentioned-I am not quite sure of the name but I think it was Brenda Delagrave-	-


George Alexander Drew: I must confess that I have sent my papers up to Hansard.


Louis Stephen St-Laurent: In any event, the lady mentioned was the member of the Davie family that Mr. Delagrave had married and whose interests he was seeking to protect. That is, of course, neither here nor there. It is just a fact that explains how it was that George T. Davie & Sons, Limited, had as its president Andre Delagrave.
Ming Sung Industrial Company
These ships were built, and I understand that a good job of work was done and that they were put out in an extremely workmanlike manner for the special conditions of the trade in which they were to engage. At that time the arrangement that was made was that fifteen per cent would be provided in United States dollars-and United States dollars were not plentiful anywhere-by the purchaser who would borrow the rest from Canadian banks and would take an export credit insurance policy under the set-up that was established by this parliament for the purpose of enabling foreign buyers to provide work in Canadian plants. Then there was the guarantee of the government of China, but that was not regarded by our banks as sufficient, any more than was the guarantee of the government of France or the government of several other countries whose citizens were placing orders in this country. It was for that purpose, and because of that necessity, that parliament set up this export credit insurance scheme.
The ships were later transferred by this Ming Sung company, a Chinese company, to a company established in Canada which, as the hon. gentleman has said, had its head office in Charlottetown. Anyone who has had any experience over the last twenty years in the practice of law and in having to advise foreigners who were setting up companies in Canada knows why Charlottetown was frequently selected as the place to have the head office of a company. Before I came here I advised1 on the incorporation of a great many companies that had their head offices in Charlottetown, and I think there were offices there which were simultaneously the head offices of tens of different companies. That feature presented nothing surprising to anyone who had been familiar with the practice which was due to the fact that provincial corporation taxes were less onerous there than they were in some other jurisdictions.
The ships were transferred from the Chinese company to this company incorporated in Canada but having Chinese nationals as a majority of its directors. But that again was nothing surprising. All hon. members of this house who are lawyers know that it quite frequently happens that there are set up for clients residing abroad Canadian companies which have one, two or three Canadian directors but whose real directors, those who control the policy, are non-residents of Canada. The ships were transferred from the Chinese company to this Canadian company, and a mortgage on the ships was given to the Chinese company and transferred by the Chinese company to

Ming Sung Industrial Company the banks as additional security. This Ming Sung company is a trading company that, from the information we had been able to secure, has been in existence for a long time and has a variety of trading interests in Asia. According to the information we got, it is a company that has always lived up to its contractual obligations and has always taken care of its debts as they mature. As a matter of fact, that is what has been done up to the present time with regard to the construction costs of all these ships.
We felt that it was desirable to make as secure as could reasonably be done the claim of the Canadian banks against the owners of the ships. In order to enable that to be done these ships were exempted from certain provisions of the Canada Shipping Act. The hon. gentleman inquires how it happens that in the list of exemptions that was tabled on the 1st of February this special one was not indicated. Well, that list is a tabulation made by the director of nautical services from the reports, or from the files, that come from various inspection districts, of which there are seven or eight throughout Canada. There is one in Vancouver, one in Quebec, one in Saint John and there are several of these steamship inspection offices to whom the owners of a ship which is not able to comply with all the requirements of the act make application for an exemption. A great many of these exemptions are granted throughout the year.
The director of the nautical services made up from his files a list of the exemptions that had been granted, and that is the list which was tabled in this house as sessional paper 124A-2 on February 1, 1951. How does it happen that he did not put this other one in? He did not put the other one in because it did not come through the ordinary channel of the district inspectors' offices.
This is something out of the ordinary. We have not a steamship inspector in Hong Kong, and there are not very many Canadian ships that are operating in foreign waters. There were not a very large number of ships built in Canada for the foreign trade.
This is a matter which had been handled here in Ottawa. I inquired, as the leader of the opposition is inquiring, why was this not in the list. It was not in the list because there was no file in that collection of files dealing with it, and as a matter of fact it is not required to be tabled until the end of this year. But it is true to state that it was not tabled at the very beginning of this session. The information about it is available and will be tabled almost at once.
Here I simply wish to make the statement that I was just as much concerned as anyone can be, and that I am satisfied so far

that what has been done was done properly, though I would be happier if this exemption had been included in the ordinary list. There was no desire to withhold anything. There had been another exemption under another section of the Canada Shipping Act, section 406, I think, which is covered by an order in council passed on May 5.
These ships-we are talking about five now-were exempted, all seven of them, from the requirements of carrying radio operators. That was done by the order in council which names the ships, and which was tabled-it was passed on May 5, and was included in the monthly summary of orders in council tabled on June 14. In any event, it was disclosed at once because it was felt that it was the proper thing to do. Now, it may be that it will turn out it was not the wise thing to do, but at the time everyone would have considered that it was the proper thing to do. It was a method that was being taken to protect, in so far as we felt it reasonable to protect, the claims of the banks for the amounts they advanced, and to protect the Canadian taxpayer against the effect of the guarantee which had been issued under this insurance scheme of export credits.
Some days before the matter was raised in the house we received information from the trade commissioner that this circular letter, or something of that kind, was going forward, and was going to the newspapers. The trade commissioner said that he was going to check because the information was from a biased source, namely the China Coast Navigating and Engineer Officers' Guild, which was not too happy over the fact that any British ship was being allowed to operate without having its personnel of officers and engineers British subjects. It was a trade situation that was displeasing to the guild of China coast navigating and engineer officers, because it allowed Chinese subjects to take jobs which otherwise would have been exclusively reserved to British subjects; the commissioner said he was going to check the assertions that were made. When the matter was first raised in the house the explanation of the Secretary of State for External Affairs (Mr. Pearson) was that he was waiting for further information in that regard.
Well, now, the information we have up to the present time-we have not yet received positive information about what goes out of Macao, which is a Portuguese port, but the information we have with respect to Hong Kong is that nothing goes out of there that is on the list of embargoed commodities of the United Kingdom and its crown colonies.

There are things which are on our embargo list, which we do not allow to be exported from Canada to China, but we felt that if ships were operating on the high seas it would not be proper for us to determine what should be the policy of the port of a friendly nation, an allied nation, a commonwealth nation, with respect to commodities that it would allow to go to communist Chinese territory.
We feel that the government of the United Kingdom., the people of the United Kingdom, would be just as much concerned if there were materials under their control going to China that could be of any help to the Chinese against British soldiers who are fighting side by side with our sons in Korea. We think that we are not the only holy people in the world, and that there are others who have the .same reaction to humanitarian and patriotic consideration that we have, and that it is proper for us to say what Canadian commodities will not be exported out of Canada to China, but that it is proper for the government of Hong Kong, the government of the United Kingdom in its crown colony of Hong Kong, to say what it considers can be exported out of Hong Kong toward China, without endangering the safety of the soldiers from the United Kingdom who are fighting alongside men from others of the United Nations in Korea.
With respect to Macao, Macao is a Portuguese port. Portugal is one of our allies in the Norih Atlantic treaty arrangement. 1 would imagine that though Portugal is not a member of the United Nations, because by the veto of the Soviet representative it has been kept out, it would be quite as much concerned as are we about support or comfort given to this aggression in Korea, because the North Atlantic treaty was formed for the very purpose of protecting North Atlantic countries against aggression. We think that by discouraging this aggression in Korea we are likely to be able to prevent aggression elsewhere. Because that is our position we are risking a great many Canadian lives and spending a great many millions of Canadian dollars.
Until we have evidence to the contrary, we think it is fair to assume that the Portuguese authorities at Macao "would no more than the British authorities at Hong Kong willingly allow contraband to be carried by these ships into Chinese territory.


George Alexander Drew: I did not want to interrupt the Prime Minister, but just so that he may help us in understanding this will he state why, if there is such confidence in what is
Ming Sung Industrial Company being done at Macao, Macao is still on our own blacklist according to our records?


Louis Stephen St-Laurent: I would not call a blacklist a list of countries for which export permits have to be obtained. I should not like it to go from this house that the attitude of the Canadian parliament is that our Portuguese allies under the North Atlantic treaty are on our blacklist. I do not think that that would be helpful.


George Alexander Drew: Mr. Speaker, just a moment; Macao is quite different from Portugal proper. Macao is included in the list of these areas to which I have just referred, not Portugal or Portuguese possessions. It is the specific port of Macao that is mentioned, for reasons which I think the Prime Minister understands.


Louis Stephen St-Laurent: The reason for this list is that we consider it preferable that no strategic materials get into that area. That is our view. We think that no strategic materials from Canada should get into that area. It may very well be that there would be no legitimate trade in them, but there is always the possibility of contraband. Though we on this side of the house do not agree with certain generals of our great allies south of the border that there should be a blockade of China, we do feel that all reasonable precautions should be taken to keep out of that area at this time such strategic materials as may be useful elsewhere. It is for that reason that exports to certain Asiatic countries cannot be made without permits.
The payments to the banks on these Chinese ships have always been regularly made, but that would not be a weighty consideration if in our opinion there were any serious grounds for thinking that the continuation of what is being done would in any way endanger any of our Canadian young men on the peninsula of Korea. That is being checked just as carefully as possible.
The hon. gentleman says, "You can tie up these ships by withdrawing the exemptions which you have granted." Probably that could be done. I imagine that the manner in which the Ming Sung Company has always conducted its operations would make it comply with any regulation that was effective in Hong Kong. Without transferring the registry of these ships to some other country they certainly could not operate with Chinese officers if these exemptions were withdrawn. I do not think that that should be undertaken lightly. I do not think it would be fair to the Canadian taxpayer to put him in the position of having to make good this guarantee unless there is more to suggest the possibility of wrongdoing than this circular letter from
4310	HOUSE OF
Ming Sung Industrial Company a source which our trade commissioner describes as being biased. That does not mean it is dishonest, but one knows how easily rumours can get started and how easily they can be propagated.
I have not yet felt that our responsibility- I take it as seriously as any member in this house-to the men we are sending to Korea requires us to take that step without further evidence that there was more than a possibility of there being contraband carried to this area. The fact that we have certain commodities that we do not allow to go to China but which up to the present time have not been prohibited from shipment out of Hong Kong does not in my view justify us in withdrawing these exemptions which have been accorded. I think it would be an indirect attempt to say to the United Kingdom government that we think they have been or are being unwise in the kind of commodities that they allow to be loaded on ships trading out of that port.
All hon. members know that the British and the Americans, or some of the Americans, have not seen eye to eye as to the proper policy or the extent of applying restrictive policies to trade with China. Some people believe that there should be an armed blockade of China preventing all kinds of trade and traffic with that country. There are several hundred million Chinese in that territory, there are several hundred million in the other Asiatic countries, and I think it would be a sorry state for the western world if all those human beings were driven permanently into the communist camp. The policy that this government and our Department of External Affairs have been trying to follow is to bring about some kind of negotiated settlement of the Korean incident in the hope that it will not become necessary permanently to treat as belonging to the iron curtain part of the world those great Asiatic populations.
These are our views which are just as honestly entertained as are entertained the views of some of the citizens of our great American ally who think that there should be at once a complete naval blockade of China. I do not doubt the honesty of such views, though I do doubt their wisdom. In this regard, what has been done up to the present time by this government with respect to these ships is what I think any government from any party in this house would have done up to this time. Whether another government made up from another party in this house would at this time withdraw the exemptions that have been accorded I am unable to say. I do not think they would. From what we have been able to ascertain through these sources up to the


present time I think it would be unwise to withdraw these exemptions and thus brand the owners of these ships as unreliable. If we branded them as unreliable and put them in the position where they cannot operate, it would be natural for them to say, "Well, you will just have to wait for your money". That again would not be enough to stop us from acting if there were any serious indication that harm to the cause of the United Nations and our men in Korea was being occasioned by the operations of these ships. But we must not lose our perspective. There is no doubt that Chinese troops are engaged in the operations in Korea, but there are between 400 million and 500 million people in China, and it is by tens of thousands that those who are engaged in warlike operations have up to the present time been counted. The rest of China is living; the rest of China is carrying on some part of its normal life; and X think there is justification for what has been up to the present time the view of the British government that it would be unwise to cut off trade in non-war commodities between Hong Kong and the mainland of China.
As to the ferrying operations to which the leader of the opposition referred, I am not in a position to give any information. Hon. members will realize that we do not attempt to put inspectors on these ships to see what they are doing. It is my understanding that Malaya is the place where Mr. Malcolm MacDonald is the governor. It may be that he would feel there are some Chinese Malayans or Malayan-Chinese whom he would like to see back on the mainland just as we would be quite happy to see anyone ferrying some who are here in Canada at the present time and to whom we would bid bon voyage if they were leaving to go back behind the iron curtain. That is one possibility. I do not know whether or not that is the real explanation, but I would not be surprised if the former high commissioner to Canada would perhaps feel that it would make his situation more comfortable if there were fewer of 'those who have any desire to go back to the mainland of China remaining under his government.
The hon. member referred to a press dispatch in which Sir Hartley Shawcross was said to have stated that the list of embargoed commodities out of Hong Kong to the mainland of China was going to be increased. We would welcome that. We have not the same opportunities for knowing the situation as have members of the United Kingdom government, but if they were to adopt the list of commodities that we have said will not be exported from Canada to China we

would be inclined to feel that it was at least confirming the wisdom of our selection. On the whole I prefer to believe that it would not be wise for us to adopt, vis-a-vis our partners in the North Atlantic treaty alliance, a holier-than-thou attitude.


George Alexander Drew: Mr. Speaker, on a question of privilege, I wish to point out that no suggestion in my remarks was directed to criticism of the British authorities in Hong Kong.


Some hon. Members:: Oh, oh.


Mr. Speaker:: Order.


George Alexander Drew: Nor was anything that I said suggestive of a blockade, nor did anything that I said indicate that we were taking any action in relation to the Chinese government, no matter what we think of it. I would point out what I was proposing was that a very special exemption be withdrawn from a Canadian company. The government of China would have absolutely no right to complain if we issued such directions to any Canadian company we saw fit, and that is what I am suggesting.


George Randolph Pearkes: Mr. Speaker, in rising to support the amendment moved by the leader of the opposition (Mr. Drew) that this house is of the opinion that the exemption granted under section 133A of the Canada Shipping Act should be removed from the seven vessels owned by the Ming Sung Industrial Company, there are certain points that I should like to bring to the attention of the house which I think emphasize the importance of taking action now and not delaying until further reports may be gathered. I suggest there is sufficient evidence at the present time to justify withdrawing the exemption. I am not surprised that the Prime Minister (Mr. St. Laurent) admitted concern over these very unfortunate circumstances that have arisen in connection with this trade. I am sure that we are all concerned about this matter because it may directly influence the course of the operations in which our troops are taking part in Korea at the present time.
Far from being any holier-than-thou attitude, the leader of the opposition was merely recommending taking reasonable precautions against the firm operating these vessels under the Canadian flag. The Prime Minister referred to the fact that this matter had been before the house on four occasions. The previous occasions were when the house was in committee of supply dealing with various estimates, and hon. members may not have had the opportunity then of expressing their opinions as to the correctness of the course recommended in the
Ming Sung Industrial Company amendment. Considerable emphasis has been laid upon the fact that the letter i received from Hong Kong was sent to other people. The letter was addressed to me personally. I can hardly call it a circular letter. I did not know that anybody else had received it when I first raised the matter.
It was stated that those who had sent the letter were biased. They are vitally concerned with the matter being a guild or union of responsible ships' officers who have been employed in the navigating and engineering services of vessels plying in the China seas. I am prepared to accept their opinion just as readily as I will accept the opinion voiced by the Chinese officials of this Chinese company who, I must also point out, would be equally biased. This morning I rose before orders of the day were called to point out that I had received' a cable from Hong Kong this morning in which confirmation was given of the statements that had been made in the letter. This certainly is not a circular letter; it is a cable addressed to me at the House of Commons, Ottawa: Reference Canadian flagged vessels trading locally. Confirm strategic cargoes loaded Macao for Canton.
It is signed by the China coast guild. There is confirmation of the statements previously made in the circular letter of June 4. The Prime Minister (Mr. St. Laurent) referred to the fact that the Ming Sung Industrial Company were always able to take care of their debts. Well, at the present moment they are engaged in a very lucrative trade. The fact that this trade is lucrative is borne out by figures in the last edition of Foreign Trade, published under the authority of the foreign trade service of the Department of Trade and Commerce, under date of June 16, 1951. These figures show the increase in trade between Hong Kong and various countries in the first quarter of this year over a similar period a year ago. At page 1066 under the caption "Hong Kong trade is largest with China" we find this statement:
Trading returns for the first quarter of 1951 reveal significant changes in the relative importance of Hong Kong's traditional partners, when compared with returns for the same period in 1950. The following table, in terms of millions of Hong Kong dollars, indicates alterations in the proportion of the colony's trade enjoyed by certain countries.
The table shows China and in brackets "including Macao"; and it is rather significant that Macao should be linked so definitely with China here. In the first quarter of 1951 the total trade with China is given as 1,028 million Hong Kong dollars, and the percentage of the total trade is 35-7. For the first quarter of 1950 the total -trade with China including Macao was 512 million Hong Kong dollars, so in the last twelve months the trade has doubled. I am not going to quote figures for
4312

Ming Sung Industrial Company the other countries mentioned, but the final note of this paragraph is also rather interesting:
It is noticeable that trade with the United States, usually Hong Kong's second most important trading partner, has declined by 40 per cent. The drop is directly related to that country's embargo against China, and its rigid control over export shipments to Hong Kong.
When one considers that this Chinese company is carrying on a major share of the trade between Hong Kong, Macao, Canton and China, and that this trade has doubled in the past twelve months, it should be well able to take care of the interest on this debt, which was originally some $12 million.
It has been stated that this company has been trading in China for a long time. It has been pointed out that the headquarters of the company are listed as being at Chungking, China, with branches at a number of Chinese ports including Shanghai, Tsingtao, and so forth. Undoubtedly this company operates in accordance with the instructions given it by the Chinese government. It could never carry on its activities all through red China unless it adhered to those instructions; and I do not suppose there is the slightest doubt but that the Chinese government makes a very good thing out of the activities of this company. No doubt the ordinary taxes would be imposed; and I think it is a pretty well known fact that in addition the handouts given by trading companies to Chinese governments of the past have been on a pretty generous scale.
Another point of interest, which I think should emphasize the necessity of taking action now, is this transfer or repatriation of Chinese communists from other parts of Asia. It will be recalled that in the letter read to the house on June 15 by the Minister of Trade and Commerce, addressed to the Hong Kong representative of the government by Mr. C. C. Yang, a member of the Ming Sung Industrial Company, he gave the routes being followed by the various vessels:
Our vessels in trade: Hong Kong-Macao, passenger and cargo; Hong Kong-Macao-Canton, passenger and cargo; Hong Kong-Canton, passenger only; Hong Kong-Canton (nonscheduled service).
Overseas Chinese sent back to China from Malaya, Indonesia and sometimes cargo.
It is rather a coincidence that in the Associated Press dispatches coming from Singapore last Monday we are told:
Glittering promises and come-back-to-China groups are luring hundreds of wide-eyed Chinese students from Singapore to communist China.
The prospect of becoming leaders of the masses . . . is held out to the youngster. Police have located undercover rings specializing in this work	
[Mr. Pearkes.l
The situation was dramatized by the pick-up in Hong Kong recently of six Chinese school girls from prominent families ....
Propaganda cells work in schools and social organizations that glorify red China, police said. At the same time, alluring letters from students already in China are bait for new converts.
So that when you read that in conjunction with the report from Foreign Trade read by the leader of the opposition, in which it mentioned that one of these vessels the Chien Men is carrying Malayan Chinese repatriates to the mainland of China, it is quite obvious the type of the repatriate who is being taken back. No one would be so naive as to think that communist China would permit anything but communists to return to China. Canton has been in the hands of the Chinese government now for the past two years.
There is one other point which I wish to bring out, and that is in connection with the statement made by the Minister of Transport (Mr. Chevrier) when he was giving the reasons for granting the exemption. On page 4172 of Hansard for June 15 this statement is made:
It was also stated that there were no British officers, mates or engineers available, and that the only officers, mates and engineers available were those of Chinese nationality.
This was referring to the time the exemption was given, which was in April of 1950. It is rather difficult to reconcile that statement with the statements which were being made in the spring of 1950 by the Minister of Transport, who was pointing out that it had become necessary to reduce the Canadian merchant marine. Many ships were being sold out of the Canadian flag, and a policy was being adopted of reducing the number of vessels we had to little more than a skeleton fleet. On page 2236 of Hansard for May 5, 1950, the Minister of Transport made the following statement in speaking on his estimates:
In passing, however, I might remind the house that Canadian costs of operation are about double British costs, and in order to maintain the Canadian shipping industry it was decided to permit owners to transfer to United Kingdom flag.
A little later he said:
At the time of such statement there were 174 Canadian owned ocean-going vessels. Two were sold since that date . . . transfers to United Kingdom flag have been approved in respect of 93 ships, and transfers in respect of 23 ships are still pending.
It will be recalled that the government policy announced about that time was that a subsidy would be given to maintain a fleet of Canadian-owned ships, I think it was about 40 vessels. This was a large reduction from the 200 odd merchant vessels we had during the war. In order to encourage merchant seamen to find other occupations, the Minister of Veterans Affairs at that time

introduced a system of extending vocational training courses to members of the merchant marine. Surely that indicates that there was no dearth of Canadian seamen at the time this exemption was being granted. The minister has not told us what steps he took to find out whether or not there were Canadian or British officers, mates and engineers available. I wonder whether he relied entirely on the word which had been given, no doubt by the Ming Sung Company.
With these facts before us, the fact that even now there should be no shortage of Canadian seamen available and anxious to find employment, the fact that it has been proven beyond doubt that material which may easily be of strategical value to the enemy is passed by these ships into communist held ports, the fact that there is a movement of Chinese communists from other ports in Asia being transported by these vessels into communist China, who may be used as leaders in various walks of life and perhaps in the armed forces which are now in operation against our own men, I feel that there is no time to be lost. It would be an exceedingly wise precaution to withdraw this exemption from these vessels now. The Canadian banks and Canadians may suffer financially a little bit. It used to be considered that $12 million was a large sum, but I do not think that $12 million is so huge a sum that it could not be taken care of by the government if the government felt it was in any way obliged to refund that amount of money.
I repeat what I said the other day. I believe Canadians would rather lose that money than think that that money was derived by possibly helping the enemy. The evidence seems to me to be so clear that I repeat I think it would be a wise course to suspend the operations of these vessels by withdrawing the exemption which was granted. For these reasons, I am supporting the amendment moved by the leader of the opposition.


Mr. Howard C. Green (Vancouver-Quadra):: There was one feature of the statement of the Prime Minister (Mr. St. Laurent) this afternoon which caused me great concern, and that was the fact that he seemed to place so little importance on the manner in which Canada gave these ships the privilege of using her flag. The Canadian merchant marine has a proud record. We have a very good Canada Shipping Act, designed for supervising the operations of that merchant marine. Yet if actions of this kind are taken to any extent, that Canadian registry will be in danger of being classified in the same way as we now class Panamanian registry. The Prime Minister knows that many ships were placed 80709-274a
Ming Sung Industrial Company under the flag of Panama under conditions which certainly did not lead to an increase in the respect for that flag.
The Prime Minister (Mr. St. Laurent) has not dealt particularly with this section 133A of the Canada Shipping Act. If he will refer to it I am convinced that, being the great lawyer he is, he will realize that that section was never designed for a use such as that to which it has been put in this present case.
The section provides that the Minister of Transport may grant exemption from the provisions of four other sections of the Canada Shipping Act. One of those four sections contains the requirement that there must be a certified master and other deck officers; a second requires that there must be certified engineers; a third provides for the production of the master's certificate when he wants to get a clearance from the customs authorities in the various ports; and the fourth section has to do with clearance for a coastal trip. In respect of each one of those provisions it obviously was intended to provide for exempting a ship where no danger to that ship would follow. For example, the last half of this section 133A reads that the minister may grant these exemptions
... if he is satisfied that that requirement has been substantially complied with in the case of that ship, or that compliance with the requirement is unnecessary in the circumstances of the case, and that the action taken or provision made as respects the subject matter of the requirement in the case of the ship is as effective as actual compliance with the requirement.	.
In other words, this section 133A is merely meant to provide that the minister may grant an exemption where, for example, the ship will be in no danger if an officer holding a certificate not up to the standard is in charge on that particular trip. That fact is confirmed by this list of exemptions which was tabled' by the Minister of Transport early in the present session. Most of the exemption^ dealing with officers of the ships provide for the carrying of a master with an inferior licence. There are a few which provide for the carrying of a master who has not a certificate, and I think there are two dealing with mates who have an inferior certificate. Then there are exemptions for engineers, chief engineers, second engineers and so on. That is the kind of exemption which was provided for by this section 133A.
There was never any intention that it should be used to enable Chinese ships or ships of any other nation to use the Canadian flag. I do not believe it was contemplated by a Canadian parliament that there would be action taken of this kind under which seven ships belonging to China have been allowed to use the Canadian flgg. In effect,

Ming Sling Industrial Company they have been given a wholesale exemption. The result of the exemption given is that Canada has said: "Here, you can use our flag; and as long as you pay back this money, we do not care what else happens." I can see that the reason for that action was to make the repayment of the money more certain. But it is breaking down the Canadian shipping [DOT]laws and taking away the value of the Canadian flag on a merchant ship.
While this fact that the ships are trading with communist China is to me a serious matter-ana I do not want to leave the impression that it is not

the other serious factor, and the one which appeals to me, is *that we have allowed the Canadian flag to be used in this way.
I suggest to the Prime Minister that he could get over the difficulty by allowing this company to register its ships in Hong Kong. Let them go under the merchant shipping act. If that is done, there can be from Hong Kong a direct control over the ships, a much better control than we can exercise from Ottawa. If, as the Prime Minister says, the owners of these ships are reliable businessmen, surely that would not endanger the amount of money that the Canadian government has tied up in this deal. The businesslike way to handle the situation now would certainly seem to be to get these ships transferred from the Canadian registry. They are *not Canadian ships. There is no reason at all why they should be classed as Canadian ships. The only thing Canadian about them is that they were built here; and they were put under Canadian registry for a purpose which was never contemplated under the Canada Shipping Act.
I urge upon the Prime Minister that he give consideration to having the ships transferred to the registry in Hong Kong, and in that way seeing to it that they no longer use the Canadian flag. Even if they have not already got into trouble, even if they have not already done things which have hurt the reputation of this nation, they are apt to do something like that in the days that lie ahead. There is still war going on in Asia. The Chinese government is still fighting the United Nations' forces in Korea. Sooner or later the fact that these ships are carrying a Canadian flag may bring great discredit to our nation. I urge upon the Prime Minister that steps be taken to have the ships transferred from the Canadian registry.


James MacKerras Macdonnell: Mr. Speaker, I want to add just a word to what has been said. There were two things said by the Prime Minister (Mr. St. Laurent) to which I wish to advert briefly. First of all,
IMr. Green.]
although the Prime Minister did not make a great point of it, he spoke of the money side; he spoke about the getting back of the money as being one of the reasons against taking the action suggested by the leader of the opposition (Mr. Drew). On that matter I just wish to say this. At the present time we are presumably spending millions of dollars every month in Korea for the purpose of protecting the lives of our own men; and it seems to me that if there is any appreciable risk of any added danger, we should not take that risk.
The second thing, and the one that I wished to stress more particularly was this. The Prime Minister seemed to suggest or rather he in fact suggested-and with considerable seriousness-that to take the action proposed, which after all is merely to withdraw a privilege which has been given, might really permanently turn against us the minds of hundreds of millions of Chinese not only in China but throughout the world. If that were true, it would of course be a dreadful and alarming thing. But I suggest to the Prime Minister that actually infinitely more serious things than that are happening at the moment. As he has said, we are actually fighting the Chinese in Korea. We are killing them and, alas, they are killing us. Therefore the suggestion that this withdrawal of a privilege from half a dozen ships, which I suggest 99-9 per cent of the Chinese throughout the world will never hear of, might prejudice our relations with those people to an extent even comparable with the prejudice which comes from the fact that we are now fighting them, is one that I confess I find to be extremely unconvincing.


Mr. Browne (St. John's West):: I was paired with the hon. member for Yukon-Mackenzie River (Mr. Simmons). Had I voted, I would have voted for the amendment.


Mr. Herridge:: I was paired.
Motion agreed to and the house went into-committee, Mr. Dion in the chair.
POST OFFICE DEPARTMENT 318. Departmental administration, $951,541.
Item stands.
DEPARTMENT OF THE SECRETARY OF STATE 439. Departmental administration, $196,501'.
Item stands.
Progress reported.
At six o'clock the house took recess.


[Stage Direction]
AFTER RECESS

The house resumed at eight o'clock.


[Stage Direction]
The house in committee on Bill No. 267, to incorporate the Scripture Gift Mission (Canada) Incorporated-Mr. Fleming-Mr. Beaudoin in the chair.
On section 1-Incorporation.
Mr. Cruickshank:: Mr. Chairman, I should-like a little-


An hon. Member:: A little light.


George Alexander Cruickshank: I want to be very brief because I want these bills to go through. I should like a little information from the sponsor of the bill which he has assured me' he has available. I presume that all these directors are residents of Canada.	_


Donald Methuen Fleming: The residences of the incorporators are set out in section 1 of the bill. They are all residents of Canada with the exception of Mr. Henman and Mr. Johnson.


[Stage Direction]
Section agreed to.
Sections 2 and 3 agreed to.
On section 4-Objects.
Mr. Robinson:: Subsection (b) of section 4 reads as follows:	[DOT]
For the advancement of Christianity to publish and circulate the holy scriptures and portions thereof, and for that purpose to sell or make grants of copies thereof, or of portions thereof, or extracts therefrom, to missionaries and others, to facilitate their dissemination, and for the purposes aforesaid to solicit and receive subscriptions* donations and legacies from the public.


Mr. Huffman:: I was paired with the hon.
member for Haldimand (Mr. Catherwood).
I am quite sure that the sponsor of the bill probably had no part in its drafting, but I am

Private Bills
wondering whether the latter words of that subsection will be sufficient protection for the corporation if it should be granted incorporation. In legal terminology the word "legacies", in Ontario at least, has a rather confined meaning. It would seem to me that if the section is left as it is now there will be no possibility of this corporation accepting devises of real estate, for instance. Has the sponsor given any thought to that particular phase of the bill, and whether the wording should not be enlarged so as to enable the incorporators to accept devises of real estate and other things which to my mind would not be covered by the present wording of the bill? I thought that the bill might be allowed to stand while the sponsor considered the appropriate wording of an amendment which would allow this corporation to accept the widest number of gifts possible.


Donald Methuen Fleming: I think if the hon. member will refer to section 9 of the bill he will see that that point is fully covered.


The Deputy Chairman:: Shall the section carry?


William Alfred Robinson: No, it does not carry.
Section 9 of the bill deals only with the power of the corporation to acquire, purchase and hold real estate. There is another section of the bill, if the sponsor has read it, which refers to devises. I should think it would be very appropriate that the sponsor should give some thought to amending subsection (b) of section 4, which may very well curtail the gifts1 that this estimable institution may obtain in the future.


Donald Methuen Fleming: The applicants for incorporation are satisfied with the form of the bill. Section 9 makes it quite clear that the corporation has power to receive lands, real estate and interests in real estate by way of devise.


Louis-René Beaudoin: Shall the clause carry?	.


William Alfred Robinson: No, I do not think it should carry yet. Before leaving subsection (b) of section 4, I might say that I hope the sponsor of the bill is right in his interpretation that the corporation will not be precluded in the future from accepting gifts such as I have mentioned. In subsection (d) of the same section one of the objects is stated to be to administer in Canada the property, business and other temporal affairs of the corporation. At the present time is there a corporation which has property, business or other affairs, and will such property be transferred after incorporation to the new company? If so, I should like to know what property and what business the incorporators have in Canada.


Donald Methuen Fleming: There is no corporation of this name at present. There is an unincorporated society which has been carrying on this type of work in Canada for the last eighteen years, and which is a Canadian offshoot of the parent society in England. The unincorporated society now carrying on work in Canada has no property at the present time. It has an office in Toronto; but a gift of land is being made to the society, and that is one reason for the application for incorporation.


William Alfred Robinson: Subclause (e) mentions that one of the objects is to establish, support and maintain a publishing house for the purpose of printing and disseminating gospel literature for the support of the doctrines and faith of the corporation. I would like to ask the sponsor whether a publishing house is in existence in Canada at present, and what literature is being disseminated.


Donald Methuen Fleming: There is no publishing house as such at the present time. The society has quarters on Spadina avenue in Toronto consisting of small office space. The society is dedicated to the work of disseminating the scriptures, usually in the form of gospels and portions. Last year in Canada, for instance, 353,409 portions of the gospels and booklets and portions from the holy scriptures were distributed in fifty languages.


Mr. Slick:: What section are we discussing?


Louis-René Beaudoin: We are now considering section 4.


Leonard T. Stick: Have we passed the first three sections?


Louis-René Beaudoin: Yes; they have
been carried.


Leonard T. Stick: It seems to me we are discussing the bill all over the place and not sticking to the section.


Mr. Dickey:: I wonder if the sponsor
would tell us whether the intention is to actually set up a printing establishment where this printing will be done, or is it simply the intention to set up an organization to prepare material and have the printing done outside their own premises under contract, or something of the kind?


Donald Methuen Fleming: I do not believe any decision has been reached on that matter yet. The plans of the incorporators probably have not extended that far up to the present. It would be a matter for decision by the board of the new corporation as plans advance.


John Horace Dickey: I take it they have no
facilities of that kind at present?


Donald Methuen Fleming: No.


[Stage Direction]
Section agreed to.

On section 5-Power to make by-laws.
William Alfred Robinson: Has the sponsor compared
this clause with clauses in similar bills; and if so, are these powers wider or of the same import as clauses in other bills of a similar nature?


Donald Methuen Fleming: I think it will keep me
sufficiently occupied answering for this bill without answering for other bills I may or may not have seen. All I can say is that as to bills designed for the purpose of incorporating religious organizations, I think this bill can be said to be in the usual form. The details of the powers set forth in section 5 I think are absolutely necessary and in good form.


William Alfred Robinson: I will rest my comments on section 5 there, though I know my hon. friend would not do so if the bill were sponsored on this side.


[Stage Direction]
Section agreed to.
Sections 6 and 7 agreed to.
On section 8-Committees.
William Alfred Robinson: There seems to be some
difference in meaning between section 6 and section 8. Section 6 reads:
Subject to and in accordance with the by-laws enacted by the corporation under section five of this act, the board of trustees of not less than six and not more than twenty elected by the corporation shall manage all temporal matters of the corporation.
Section 8, on the contrary, reads:
The corporation may exercise all its powers by and through such committees as it may appoint from time to time by by-law.
There seems to be a discrepancy between the wording of section 6 and that of section 8, and I am wondering if the sponsor would not feel easier in his mind if that discrepancy were cleared up. Again I suggest that the bill be permitted to stand until he has considered this point and perhaps introduced an appropriate amendment.


Donald Methuen Fleming: I appreciate the unselfish
solicitude of my hon. friend. I do not suppose I can convince him there is no discrepancy; however, if he will give due weight to the opening words of section 6 I think he will see there is no discrepancy such as the one he claims to have found lurking in the proverbial woodpile here. Section 6 begins with the qualifying words "subject to and in accordance with the by-laws enacted by the corporation." Section 8 makes provision for carrying on certain aspects of the work of the corporation by special committees appointed by by-law.


William Alfred Robinson: I appreciate the very
adequate explanation given by the hon.
Private Bills
member, but section 6 mentions the temporal matters of the corporation. Can the hon. member explain what the temporal matters are, and how he distinguishes those from the powers mentioned in section 8?


Donald Methuen Fleming: It will give me great
pleasure to have a chat with my hon. friend later and explain what temporal matters are.


William Alfred Robinson: Well, I do not feel I have
had an adequate answer to my question.


[Stage Direction]
Section agreed to.
Sections 9 and 10 agreed to.
On section 11-Obligation to dispose of lands.
William Alfred Robinson: Subsection 1 reads:
No parcel of land or interest therein at any time acquired by the corporation and not required for its actual use and occupation, and not held by way of security, shall be held by the corporation-
Would the sponsor say what is the meaning of the words "not held by way of security"?


Donald Methuen Fleming: The bill makes provision for the corporation to hold mortgages on real estate. That is one of the ways in which they may invest any funds available for investment. Lands "not held by way of security" would include lands not held by way of mortgage.


William Alfred Robinson: Does the hon. member mean that for the words I have just quoted we could substitute the words "and not held under mortgage"?


Donald Methuen Fleming: I am afraid the hon. member is putting an interpretation on my words which strains them. I think his alternative suggestion would somewhat narrow the language of the bill and in that way would be a detriment rather than an advantage, much as I appreciate his helpful suggestion.


[Stage Direction]
Section agreed to.
Sections 12 and 13 agreed to.
On section 14-Execution of documents.
William Alfred Robinson: I have something to say on this section with which I am quite sure my hon. friend will agree. It reads:
Any deed or other instrument relating to real estate vested in the corporation or to any interest in such real estate shall, if executed within the jurisdiction of the parliament of Canada, be deemed to be duly executed if there is affixed thereto the seal of the corporation and there is thereon the signature of any officer of the corporation duly authorized for such purpose, or of his lawful attorney.
%
It seems to me that the latter words of the section "or of his lawful attorney" are a departure from ordinary business practice.

Private Bills
I should think it would be usual in the case of most corporations to appoint two, three or more signing officers who can sign in one another's absence. It seems to me also that it is a dangerous precedent to allow a corporate officer to appoint an attorney. In fact, I may go further and say that I doubt if it is within the powers of a corporate officer to delegate his authority. I believe this clause should be amended so as to eliminate the latter words, and use the signatures of the principal officers of the corporation instead of a lawful attorney.


Donald Methuen Fleming: It is a pleasure, Mr. Chairman, to see the way in which the hon. member has given careful study to this bill. I appreciate that he has done that out of recognition of the importance of the bill.
I have no doubt that the corporation will make adequate provision for the appointment of alternative signing officers. However, as to the concluding words of the section to which the hon. member has drawn attention, may I say that they are by no means unusual. If he will look at the next bill on the order paper, Bill No. 268, an act to incorporate the Polish National Catholic Church of America in Canada, seotion 14-


Mr. Croll:: On a matter of privilege, I
object to getting into the argument on this particular bill in any way at all.


William Alfred Robinson: I assure the hon. member I have also examined Bill No. 268 with similar care.


Donald Methuen Fleming: I simply draw to the attention oif the committee the fact that the bill to which I have just made a very respectful and deferential allusion contains in section 14 the precise counterpart of section 14 of the bill now under review, including the words "or of his lawful attorney".


William Alfred Robinson: I have no doubt there are many precedents in this file of documents which I have before me of similar language. The question which I asked the hon. member was this. As a practising lawyer in Ontario, does he not feel that these words in this bill are superfluous, and perhaps a derogation from established authority? If necessary I intend to move that the words "or of his lawful attorney" be eliminated from the bill. I would much prefer to merely make the suggestion and have the hon. member who is sponsoring the bill move the amendment.


Donald Methuen Fleming: I believe, Mr. Chairman, the hon. member will agree that I am sponsoring quite enough now without taking on any amendments.


William Alfred Robinson: Then may I move, seconded by the hon. member for Skeena:
That the words at the end of section 14 of this bill "or of his lawful attorney" be eliminated.
The Depuiy Chairman:	Order. The
standing orders require that amendments be given to the chairman in writing. I understand the hon. member is now writing out his amendment. Before he sends it over may I say that I have heard it, and consider that it would be a rather important amendment. I should like to draw to his attention standing order 113 which says:
No important amendment may be proposed to any private bill, in a committee of the whole house, or at the third reading of the bill, unless one day's notice of the same has been given.
The amendment, therefore, would be out of order at this time.


William Alfred Robinson: In answer to that, since
the hon. member sponsoring the bill refuses to sponsor the amendment, perhaps he does not consider it important.


Mr. Applewhaite:: Speaking to the point
of order, I must admit Your Honour's decision is well taken. I might take a few moments of the committee's time to point out to the hon. member who has moved the amendment that he is not entirely debarred from his remedy. Citation 811 of Beauchesne says that it is the correct course, in all cases where it is necessary-
The Depuiy Chairman:	Order. If the
hon. member wishes to make a suggestion to some other hon. member he must not do so on the section of a bill. I have made my ruling and the ruling is not debatable. The hon. member of course may appeal it, but it is not debatable.


Edward Turney Applewhaite: I would not appeal your ruling but might I, with deference, suggest that we might have had time to discuss the point of order.
The Depuiy Chairman:	The hon. member
will agree with me that whenever an amendment has been proposed it is for the chairman to decide whether or not it is to be accepted. I have decided I could not accept it because of standing order 113. That ruling being made, and being based on a standing order which is very clear, I do not think I should ask the opinion of hon. members. A point of order is discussed at the request of the chairman when he has some doubts as to whether or not a certain amendment is in order. But when he has no doubt whatever, it would be useless to waste the time of the committee by asking the opinion of various members.


William Alfred Robinson: Mr. Chairman, I do not
dispute your ruling, and I assure you that I am merely trying to be helpful.


[Stage Direction]
Section agreed to.
Sections 15 and 16 agreed to.
On section 17-Investment of funds.
William Alfred Robinson: Section 17 reads as follows: The corporation may also invest and reinvest any of its funds-
(a)	in any bonds or debentures of any municipality or public school corporation or district in Canada, or in securities of or guaranteed by the government of Canada or of any province thereof;
(b)	in first mortgages or freehold property in Canada and for the purposes of the same may take mortgages or assignments thereof whether such mortgages or assignments be made directly to the corporation in its own corporate name or to some company or person in trust for it, and may sell and assign the same;
(c)	in any securities in which life insurance companies are authorized from time to time by the parliament of Canada to invest funds, subject to the limitation on investments in stocks, bonds and debentures set out in the Canadian and British Insurance Companies Act, 1932.
I feel that this is a most important section of this bill, in view of the provisions of section 4, which I previously drew to the attention of the committee and which provides that this corporation may accept subscriptions, donations and legacies from the public. I should like to ask the sponsor whether the provisions of section 17 limit the corporation to the same investments which would be authorized, say in Ontario, as trustee investments.


Donald Methuen Fleming: Mr. Chairman, I think it is quite obvious that the provisions of section 17 speak for themselves, and will not admit of any derogation on the part of provincial legislation. However, with due regard for the importance of the language used in the section, I think the hon. member will agree it is highly important that the powers thereby conferred should be put to work. The powers in section 17 of the bill can be put to work only if the corporation really has funds to invest, and as its only source of funds for investment or any other use in connection with this work is, as the hon. member has indicated, by subscription or charitable donation, may I say to the hon. member that I, on behalf of the corporation, shall be extremely glad to receive his subscription so that we may put these powers of investment to work.


William Alfred Robinson: I assure the hon. member that I shall be glad to forward a subscription. But at the same time my question has not been answered by any manner of means. I asked a direct question, namely whether the sponsor has examined the terms of section 17
Private Bills
to ascertain whether the subscribers to this corporation will have the same treatment as is afforded to investors in trustee investments in the province of Ontario. I have taken that province as an example because I know it better than the others. But I think it is a perfectly fair question to ask the hon. member whether this company is limited to the trustee investments such as we know them in the province of Ontario.


Donald Methuen Fleming: The limitation so far as the investment powers of the corporation are concerned is defined in section 17, not by the Trustee Act of the province of Ontario. I think it will be clear that the provisions of section 17 are not identical with those governing the investment in trustee securities on the part of corporations or trustees subject to the Trustee Act in the province of Ontario.


William Alfred Robinson: Mr. Chairman, I must
confess that I am entirely dissatisfied with the answer which has been given to my question on section '17. I should therefore like to move, seconded by the hon. member for Skeena, that the committee rise and report progress.
Motion negatived.


[Stage Direction]
Section agreed to.
Section 18 agreed to.
Title agreed to.
Bill reported, read the third time and passed.

[Stage Direction]
The house in committee on Bill No. 268, to incorporate the Polish National Catholic Church of America in Canada-Mr. Croll- Mr. Beaudoin in the chair.
Sections 1 and 2 agreed to.
On section 3-Head office.
William Alfred Robinson: I was wondering if it were necessary to have the wide powers as to head office that are requested by section 3 of this bill. Section 3, subsection 1, reads as follows:
The head office of the corporation shall be in the city of Toronto, in the province of Ontario, or at such other place in Canada as may be decided by the corporation.
I should like to inquire of the sponsor whether it would not be agreeable to eliminate the latter words of the section so as to keep the head office of the corporation in Ontario.


David Arnold Croll: Mr. Chairman, that is a highly desirable recommendation, but I do not think I would suggest it to the committee. As a

Private Bills
matter of fact, it may be that the organization is considering Midland, and I would not want in any way to deprive that worthy city of having the head office of this fine corporation.


[Stage Direction]
Section agreed to.
Sections 4 and 5 agreed to.
On section 6-Management.
William Alfred Robinson: Mr. Chairman, I presume
that the sponsor of this bill has now had some notice of the question which I intend to ask. Here again this section seems to me to be linked with section 8. Section 6 is similar to a section in the bill we were considering a few moments ago. Section 6 reads as follows:
Subject to and in accordance with the by-laws enacted by the corporation under section five of this act, the board of trustees of seven members elected by the corporation shall manage all temporal matters of the corporation.
Section 8, on the contrary, reads as follows:
The corporation may exercise all its powers by and through such committees as it may appoint from time to time by by-law.
On the previous bill I had, from a member of the legal profession, an answer to a somewhat similar question. I should like to know whether the sponsor of this bill considers my objection to be valid or whether he would prefer to have the sections stand as they are. I still feel that there is some discrepancy between the wording of the two sections, and that it would be advisable for the sponsors to consider them carefully before they insist on passing them.


David Arnold Croll: All I can say, Mr. Chairman,
is that I agree with the view of the hon. member for Eglinton with respect to the interpretation of this section. Since the committee has seen fit to endorse his view, I ask that it also endorse this section.


[Stage Direction]
Section agreed to.
Sections 7 to 10 inclusive agreed to.
On section 11-Obligation to dispose of lands.
William Alfred Robinson: I should like to have the
views of the sponsor of this bill on the exact meaning of the words "and not held by way of security" in line three of section 11, subsection 1.


David Arnold Croll: Mr. Chairman, I cannot add
anything to what has already been said with respect to this section. It is in identically the same terms as the other one.


[Stage Direction]
Section agreed to.
Sections 12 and 13 agreed to.

On section 14-Execution of documents.
William Alfred Robinson: Mr. Chairman, I was
wondering if the sponsor of this bill, who was in the house when I was inquiring with regard to a similar section in the previous bill, would not agree to the elimination of the last five words of the section, namely "or of his lawful attorney"?


David Arnold Croll: Mr. Chairman, I thought the
hon. member's argument was extremely well made indeed but that it did not have much substance to it. I think that section 14 should stand as it is.


[Stage Direction]
Section agreed to.
Sections 15 and 16 agreed to.
On section 17-Investment of funds.
William Alfred Robinson: I should like to ask the
sponsor of this bill whether this section protects the shareholders or members of the corporation to the same extent that the Trustee Act in Ontario, with regard to trustee investments, protects, for instance, the beneficiaries of estates.


David Arnold Croll: Paragraph (c) is a new one that was added to these bills this year in view of the amendment that was made last year to the Canadian and British Insurance Companies Act. It was first incorporated in the United Church Act. It was felt that it gave the necessary protection as indicated by the hon. member for Simcoe East.


John William Gordon Hunter: I am not sure whether the sponsors have considered this paragraph, but it is usual for trustees or for those acting in a fiduciary capacity to go not over 50 per cent, or at the most 60 per cent, on first mortgages. While I am not suggesting that the people who are in this bill as the original incorporators are incompetent in any way, in view of the fact that they are acting as trustees, and will be acting as trustees of very large sums of money in the future, I have no doubt, it has struck me that the sponsor may very well have neglected to investigate the very wide powers of investment in first mortgages which they have, and they may wish to have that restriction put in that is normally put in the powers of trustees, and which may just have slipped by. I would suggest that a percentage be inserted, and it would be a wise precaution.


William Alfred Robinson: I should think that we should have an answer to the question that has just been asked. It goes to the root of the question that I asked previously.


David Arnold Croll: This is a normal clause in all these bills. It was examined very carefully

in committee. We think it gives ample, protection both to the public and to the incorporators. That is all I can say.


Louis-René Beaudoin: Shall the clause
carry?


Some hon. Members:: No.


William Alfred Robinson: I do not feel that that is sufficient. For instance, the hon. member who has just spoken mentioned paragraph tb) which deals with first mortgages. But paragraph (a) deals with bonds or debentures of any municipality or public school corporation or district in Canada, or in securities of or guaranteed by the government of Canada or of any province thereof.
I would not like to be dogmatic about it, but I doubt very much whether under our trustee investment laws in the province of Ontario it is possible to invest in the debentures of a public school corporation, and we are perfectly justified in asking why this corporation should have wider powers of investment than are allowed to corporations of a similar nature.


David Arnold Croll: The powers are no wider than those which are normally given under these conditions, and time and again they have been endorsed in this house and as late as ten minutes ago.


[Stage Direction]
Section agreed to.
Section 18 agreed to.
Title agreed to.
Bill reported, read the third time and passed.

[Stage Direction]
The house in committee on Bill No. 337, to incorporate the Ukrainian Catholic Episcopal Corporation of Saskatchewan-Mr. Knight- Mr. Beaudoin in the chair.
On section 1-Incorporation.
Robert Ross (Roy) Knight: On a point of order, I think section 1 is carried.


Louis-René Beaudoin: Yes, section 1 is carried.
On section 2-Head office.


Robert Ross (Roy) Knight: On Friday night the hon. member for Simcoe East was good enough to suggest that I should accept an amendment to this clause. At that time I was not able to hear him distinctly at this distance in the chamber, but in reading the matter over in Hansard I thought that the hon. member's suggestion was a very good one, and I thank him for it. I propose to take advantage of it.
80709-275~
Private Bills
In doing this I may say that I have the assent of the parliamentary agent of the proposed corporation. The amendment affects clause 2,; subsection 1, and would have as its object inserting after the word "place" the words "in the said province". Perhaps one of my colleagues would be good enough to move this amendment. Clause 2, section 1, would then read:
The head office of the corporation shall be at the city of Saskatoon, in the province of Saskatchewan, or at such other place in the said province as may be appointed by the corporation.
If that suits the will of my hon. friend I shall ask my colleague to move the amendment.


Mr. Stewart (Winnipeg North):: I so move.


Louis-René Beaudoin: Shall the amend-, ment carry?


Edward Turney Applewhaite: Has it not just been ruled-that at this stage in the committee of the whole an amendment to a section cannot be made?


Louis-René Beaudoin: At this point I must decide whether or not the amendment is material or important. I have heard the hon. member for Saskatoon read his amendment, and in the course of his remarks he said that he has the assent of the parliamentary agent. Furthermore, I consider that this amendment is not a material or important one and therefore I have decided to accept it. If the hon. member for Skeena and others consider that the matter is doubtful, I am prepared to put the question as to whether or not the amendment is important.


Edward Turney Applewhaite: Mr. Chairman, I have no intention of criticizing the ruling which you made. Doubtless you were justified in making it, but I gather you would consider it desirable that the practice should be as uniform as possible. May I say this with respect, and not by way of criticism. If the question whether or not a motion is important is the decisive factor as to whether or not it should be made at this time-I know the word "important" is in standing order 113- I would suggest that the question of its, importance is one on which the house might on occasions at least see fit to make representations. In this case, sir, 1 am willing to accept wholeheartedly what I understand is your decision, that the amendment is not important.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
Sections 3 to 8 inclusive agreed to.
[Stage Direction]
Private Bills
On section 9-Execution of documents.
William Alfred Robinson: As the sponsor of this bill has been so kind as to move the amendment which I suggested a few days ago, I wonder if he will be willing to consider an amendment similar to those I suggested in connection with like sections in two other bills which came before us this evening. Section 9 reads:
Any deed or other instrument relating to real property vested in the corporation or to any interest in such real property shall, if executed within the jurisdiction of the parliament of Canada, be deemed to be duly executed if there are affixed thereto the seal of the corporation and the signature of any officer of the corporation duly authorized for such purpose or his lawful attorney.
As I have said on two previous occasions tonight, I believe the concluding words of the section "or his lawful attorney" are a departure from business practice as followed t>y most corporations. I believe it would be possible for the corporation by means of a bylaw to authorize two, three, four or more signing officers so that they would never be without an officer to deal with a matter of this kind. As I said before, I feel it is dangerous to allow an officer of a corporation to delegate his authority to someone who is not responsible to the shareholders or members of the corporation. I ask the sponsor of this bill, as I asked the sponsors of the previous bills, to agree to the elimination of the last four words of this section. I hope the sponsor will be as kind in this respect as he was in respect to section 2.


Robert Ross (Roy) Knight: As my hon. and learned friend knows, these matters are beyond a layman and I can only quote two other authorities, the hon. and learned member for Spadina and the hon. and learned member for Eglin-fon,- who have stated that this is the usual form of incorporation and that these words are customary. I appreciate my hon. friend's interest and sincerity in wishing to have this bill drawn up properly. As I said before, I cannot let my limited knowledge of the law accept the amendment unless it is endorsed by the legal firm who is looking after the interests of this corporation.


William Alfred Robinson: I have no desire to put my hon. friend in any embarrassing position with respect to the wording of the section. This matter is of some importance and I .suggest that it might be well to allow the bill to stand until the hon. member may have the advice of the solicitors as to whether they consider the amendment which I have suggested to be desirable. I suggest that the bill stand until my hon. friend has had an opportunity to .obtain that advice.
{Mr. Applewhnite !


Mr. Gibson:: I was wondering about this
section and perhaps my legal friends can advise me. The section reads:
Any deed or other instrument relating to real property vested in the corporation or to any interest in such property shall, if executed within the jurisdiction of the parliament of Canada, be deemed to be duly executed-
What is the inference to be drawn from the words "executed within the jurisdiction of the parliament of Canada"? Probably the sponsor could answer that question.


William Scottie Bryce: We did not hear what you
said.


[Stage Direction]
Section agreed to.
Section 10 agreed to.
On section 11-Investment of funds.
William Alfred Robinson: This section is considerably broader than the sections in the two bills we considered earlier this evening. The section reads:
The corporation may invest its funds, or any portion thereof, either directly in the name of the corporation or indirectly in the name of trustees, in the purchase of such securities as it may deem advisable, and also may lend its funds or any portion thereof on any such securities.
That is practically a blank cheque to this corporation to invest in any securities whatsoever and to lend its funds on the security of any securities whatsoever. I objected to the safeguards which were contained in the previous bills, but this section goes immeasurably farther than the sections in the previous bill. I consider it to be very broad and I was wondering if the sponsor could say whether that particular aspect has been considered and whether this section has been compared with similar sections in other bills.
Progress reported.


The Acting Speaker (Mr. Beaudoin):: The
house will resume the business which was under consideration at six o'clock.

The house in committee of supply, Mr. Beaudoin in the chair.
DEPARTMENT OF MINES AND TECHNICAL SURVEYS Administration services-
217.	Departmental administration, $398,452.


Mr. Black (Cumberland):: Mr. Chairman, this is an important department affecting all of Canada, some parts more than others, and perhaps we should have a statement from the minister as to the main activities of the department last year and what is proposed for the current year. We have a large variety

of mines in Nova Scotia, more particularly coal, but gold and other minerals are found in small quantities. We have hopes of developing this phase of mining activity. Some hon. members have a particular interest in some of the items, and in the meantime perhaps the minister would make a general statement.


George Prudham: The branches of this department are the mines branch, the geological survey of Canada, the surveys and mapping branch, the geographical branch and the dominion observatories. The functions of these branches may be described briefly as follows:	The mines branch undertakes in
its laboratories the analysis of ores and minerals of economic interest, metallic, nonmetallic, radioactive and fuels, their production, processing, utilization and marketing, the investigation of metals and alloys and their properties and uses. The information thus secured is made available to the mining and metallurgical industries of Canada with a view to stimulating the production, use and export of the country's mineral wealth.
The geological survey of Canada carries on geological studies in the field and office designed to promote the discovery and development of Canada's mineral resources. The results of investigations are made available to prospectors and other interested parties in the form of geological maps and reports. It also carries on surveys using the recently developed airborne magnetometer. The branch provides, free of charge, identification of mineral specimens submitted by prospectors and the general public, and checks samples for radioactivity.
The surveys and mapping branch is made up of five divisions. They are as follows: Topographical survey, Canadian hydrographic service, geodetic survey of Canada, legal surveys and aeronautical charts, and map compilation and reproduction. Their main functions are as follows: The topographical survey division is the primary mapping organization of the federal government, and is responsible for topographical mapping on scales of four miles to one inch and larger, from both ground and air surveys. It carries out the surveys for the control of air photography, details topography from both ground surveys and air photographs, and prepares the resulting maps to the manuscript stage.
The Canadian hydrographic service is responsible for the charting of the coastal and inland waters of Canada, and for the study of the water levels on the great lakes and the St. Lawrence waterway. It carries out hydrographic surveys and investigations,
Supply-Mines and Technical Surveys and publishes charts, sailing directions, tide tables and other results of its work.
The geodetic survey of Canada provides a national system of precise triangulation. and level control on which are based detailed topographical, hydrographic and other surveys. It provides control for air surveys inremote areas by means of astronomical fixations. The geodetic survey is currently co-operating with the national research council and the Royal Canadian Air Force in the development of shoran apparatus, and techniques designed to obtain geodetic measurements from aircraft.
The legal surveys and aeronautical charts unit carries out surveys of dominion land under the direction of the surveyor general. It is also responsible for the preparation of air navigation charts used in the "Canada Air Pilot", and for this purpose plots air photographs on scales smaller than four miles to one inch. It maintains a central distribution office for all maps prepared in the surveys and mapping branch.
The map compilation and reproduction division is the division which is responsible for the drafting of the maps produced by all divisions of the surveys and mapping branch, and for the printing of both maps and charts. To carry out this function it has specialized compiling, drafting, photographic and lithographic units.
The geographical branch is a comparatively new one, having been organized in 1947 with-the objective of collecting and making available geographical data on Canada and foreign countries for the use of government and other interested organizations. It is currently engaged in the preparation of an atlas of Canada, and the compilation of geographical data on strategic areas ii)t northern Canada and on the east and west coasts.
So far as the dominion observatories are concerned, the main observatories are located at Ottawa and Victoria, B.C. They are responsible for scientific studies in stellar and solar physics, in terrestrial magnetism, ingravity and seismology. From Ottawa Canadian standard time is broadcast over station? CHU for the benefit of surveyors, aerial navigators and ocean shipping.


Herbert Wilfred Herridge: When the estimates of the-Department of Resources and Development were under discussion I asked a question with respect to the development of the sur-r veys of the Columbia river basin in which my constituents and the people of British Columbia generally are interested. At that
4324	HOUSE OF
Supply-Mines and Technical Surveys time the Minister of Resources and Development advised me that I should direct my .questions to the Minister of Mines and Technical Surveys when his estimates were before .the committee inasmuch as there had been a transfer of funds after they had been voted in the estimates of the Department of Resources and Development. I should like to ask the minister if he can give this com-#nittee some information as to the drilling that is taking place along the Columbia river ,with a view to finding suitable foundations for dam sites, what has been the result of the drilling done to date, the various points at which it has been undertaken, and what dam sites are to be investigated in the current year.


George Prudham: This department does not carry out any development work. We merely act in an advisory capacity to the Department of Resources and Development and the Department of Public Works. I believe the Department of Public Works' is doing the drilling that the hon. member has mentioned. ,We have undertaken to compile eighty-eight map sheets for that area. Thirty-six are completed and some survey work only is completed on the balance. We have one geologist on the dam sites that the hon. member has mentioned.
'[DOT] Mr. Herridge: So far as drilling is concerned, should I direct my question to the Minister of Public Works when his estimates are under discussion?


George Prudham: I believe so.
.* Mr. Adamson: I should like to ask the minister a question about the water levels on the great lakes. At the present time the water levels particularly of lake Ontario and Surrounding waters are abnormally high. It is generally considered that they follow a certain cyclical trend. We used to call it the old seven year cycle or seven year sine. Three or four years of abnormally high water have rather upset all previous calculations, and it is causing a great deal of damage to the shore line. I should like the minister to say whether the geodetic survey has made any study of the level of the waters of the great lakes, and I would ask him whether he has any statement to make on the abnormally high water level which has persisted for a number of years.


George Prudham: This department has taken levels through the hydrographic survey branch and has made the information available. That is as far as our responsibility goes.


Mr. Adamson:: Is nothing done about runoffs? Is nothing done about the flow of


rivers? Is nothing done about the flow of the Niagara river and the St. Lawrence river?


George Prudham: I believe that comes under the water and power bureau of the Department of Resources and Development.


Agar Rodney Adamson: That brings up the next question. Where does the Department of Resources and Development stop and where does the Department of Mines and Technical Surveys start? Where is the division of authority between the two?


George Prudham: This is a technical department only; we do not do any development work. We carry out survey projects for other departments.


Agar Rodney Adamson: That was the policy of the old department of mines; they did not do any development work. I remember the survey and prospecting parties going into the field, and the one thing they were afraid of was that they might find an ore deposit. I assume the minister is equally hopeful that they do not find anything of commercial value. All they want to do is chart the geology of the country. With respect to the geological survey, would the minister say how many parties are out this year, where they are; who is the chief of the geological survey branch and if possible who are the chiefs of the various parties?


George Prudham: I think we can give that information when we come to the particular item if that would be satisfactory.


Agar Rodney Adamson: That is perfectly satisfactory. Now I should like to ask a question with regard to the air survey. Would the minister say how much of the dominion has been mapped and what is the program for the coming year with regard to topographical mapping through the air survey? At the same time could he explain the "Canada Air Pilot", whether it is on a route basis or an area basis.


George Prudham: The department tries to photograph from the air about 200,000 square miles a year. For the actual topographical mapping survey work we have about sixty parties in the field.


Agar Rodney Adamson: That is, as distinct from the geological survey, there are sixty mapping parties? Are these all airborne, and how many personnel would be in this group?


George Prudham: The average party consists of five or six persons, and they are usually transported to the remote areas by air and then left to do their survey work on foot.


Agar Rodney Adamson: It is the old method of triangulation and ground survey; it is not done by aerial photography?


George Prudham: These survey parties establish control points which can be related to the aerial maps.


Agar Rodney Adamson: I would be interested to learn how much of the country is being mapped, because I realize there is a tremendous job to be done in mapping the country both topographically and geologically. In Canada we have pioneered in air mapping, and I wonder if the minister could say how much has been mapped, what is the furthest boundary north, how much it is expected will be done this year, whether we are mapping north of the tree line yet, whether we are mapping in the Northwest Territories, whether we are dealing with specific things such as river basins, and in short a general statement. I appreciate that the topographical mapping of the country presents the department with a tremendous job and I would like the minister to explain what is being done.


Mr. Murray (Cariboo):: A great deal of topographical work has been carried out in the northern reaches of the Cariboo, some of it in co-operation with the Americans in Alaska. In our own district the work of photographing from the air is well in advance of anything the United States is carrying out on its side of the line. I happen to know that from conversation with some of the surveyors and I thought it would be of interest to hon. members.


George Prudham: Practically all Canada to the remote north has been photographed and mapped by the trimetrogon system. They are now proceeding to photograph it by vertical photography, and relating it to the control points established by these topographical parties. About two-thirds of the photography by the second method has been completed.


Agar Rodney Adamson: Has it been carried on north of the boundaries of the three prairie provinces? Have those provinces been mapped?


George Prudham: The trimetrogon work has all been done.


Agar Rodney Adamson: Those maps are available?


George Prudham: They are available at eight miles to the inch only.


Agar Rodney Adamson: There are no maps at four miles to the inch or one mile to the inch for that territory?


George Prudham: Not yet.


Gordon Knapman Fraser: Has the air force helped in that work?


George Prudham: The air force has been doing a great deal of that work. This year of necessity they have had to curtail their activity,
Supply-Mines and Technical Surveys and for that reason we are having to engage more private companies to do it.


Louis-René Beaudoin: Order. Since hon. members began putting questions to the minister on mapping, topographical surveys and so on, I have been examining the estimates. If it is the wish of the committee to have a discussion on item 228 now, let us do so, but if not let us pass the first item. Twice I have asked if the first item, departmental administration, is carried, and each time I am told it is not. Everyone is discussing mapping and topographical survey, a discussion which should take place on item 228. Let us carry the first item; the sooner we do so the sooner we will reach item 228.


Gordon Knapman Fraser: I thought while we were in the air we should finish it.


Louis-René Beaudoin: Perhaps we should come down to earth.


Mr. Murphy:: Under this department is survey work carried on in connection with uranium?


George Prudham: Yes.


Joseph Warner Murphy: Would the minister tell the committee the extent of the work that has been carried on during the past year?


George Prudham: That comes under a
specific item, and I would prefer to wait until that item is reached.


Agar Rodney Adamson: Under this item would the
minister explain what facilities his department has in Ottawa? Some of the most efficient methods now being used in connection with our present mining development were developed by our scientists and engineers and chemists and physicists here in Ottawa, and I should like to know whether the ore dressing laboratories and other facilities of the old department are now under this department or whether they are under the Department of Resources and Development? I should like to know where the division is, because the work being done by these scientists and engineers in these laboratories has been pioneer work in ore development and ore treatment, not only in Canada but in the world.


George Prudham: That all comes under this
department now. We have a radioactive laboratory in the mines branch for the testing of radioactive ores and a laboratory under the geological surveys for the identification of minerals, in addition to these other laboratories which the hon. member has mentioned. We have the mineral processing division, the industrial minerals division, the fuels division, the physical metallurgy division and the minerals resources division.
4326	HOUSE OF
Supply-Mines and Technical Surveys


Agar Rodney Adamson: All these laboratories are situated in Ottawa?


George Prudham: Yes, on Booth street.


[Stage Direction]
Item agreed to.
Explosives Act administration-
218.	Administration, operation and maintenance, $88,164.
Gordon Knapman Fraser: Does an individual have to
have a permit if he has an explosive in his possession, that is for stumping powder and things of that kind?


George Prudham: I see a provision for a
two-dollar fee for individual permits, so I presume that is so.


Mr. Thomas:: Before this item carries,
will the minister tell the committee just how much control his department has over the storage of military explosives, shells and things of that kind?


George Prudham: This department has no
control over the storage facilities of the armed forces. If there should be an explosion, we would investigate the catastrophe with the armed force concerned.


Gordon Knapman Fraser: The minister mentioned a
two-dollar fee for a permit. Does he mean to say that a farmer has to have a permit and pay two dollars in order to blow up stumps on his property? I do not think that is proper. The two-dollar fee would be for those who buy explosives in carload lots, and store them.


George Prudham: There is no fee charged
an individual doing that type of work.


[Stage Direction]
Item agreed to.
Mines branch-
219.	Mines branch administration, $70,093.
Mr. Follwell:: I believe this is the item
under which I should ask the question supplementary to the one asked by the member for York West concerning aerial survey mapping of the Northwest Territories. He received a rather sketchy answer, but perhaps it went as far as the minister was able to go at this time. Will the minister state just how much of the Northwest Territories has been mapped by aerial photography, and if there has been any particular aerial photography done in the Baffinland area?


George Prudham: Is this item 219, Mr. Chairman?


Louis-René Beaudoin: Yes, item 219.


George Prudham: I do not think the question relates to that particular item.


Frank Sidney Follwell: The reason I asked it, sir,
is that the item refers particularly to mineral resources investigation. I presume that would be investigation of mineral resources, but I could be wrong.


George Matheson Murray: Under this heading, might I ask if there is any intention of reviving a provincial-dominion arrangement whereby trails and transportation facilities are opened up into new property? Some years ago the government of Canada contributed probably one-half to projects of that kind. I think it would be important to canvass the possibilities of reopening such an arrangement. In my own district a good many new mines were brought in as a result of the co-operative efforts between Ottawa and the department of mines at Victoria. In some cases private corporations were able j,o contribute something towards the building of a road into a new property. I believe that this properly comes under this heading, and I should like the minister to say whether he intends to reopen this provision?


George Prudham: In answer to the member
for Hastings South, may I say that the territory has been completely mapped by the trimetric system, and they are now proceeding with more detailed surveys. Some districts have been quite completely mapped, and others have not been. If there is any particular area the hon. member has in mind, we could perhaps give more precise information.


Frank Sidney Follwell: The particular area I mentioned was the Baffinland area. Are there any aerial photographs available of that area now?


George Prudham: Yes, Mr. Chairman, aerial
photographs are available by the trimetric method.


Agar Rodney Adamson: That is eight miles to the
inch?


George Prudham: Yes, eight miles to the
inch. In answer to the hon. member for Cariboo, the development of roads into mining areas in the Northwest Territories would come under the Department of Resources and Development. This department would most likely be called in for advice and information on the geological prospects in the area before such a grant was considered.


William Moore Benidickson: I understood the federal government has associated itself with the province of Manitoba recently in connection with a mining road into a camp which I believe was called Snow Lake. How recently have any joint arrangements been made in that territory?


George Prudham: That road was started by
the old department of mines and resources. This new department has had something to do with the completion of the road, and I believe it is now completed.


William Moore Benidickson: What percentage of the
cost of that road was borne by the federal government?


George Prudham: I am sorry, but that information went to the Department of Resources and Development when the departments were divided.


William Moore Benidickson: During the past year
have there been any requests from the province of Ontario for assistance in connection with the construction of the mining development roads?


George Prudham: There have been general
discussions with mining officials in Ontario, but no specific requests.


Percy Ellis Wright: Do these mining survey parties carry the necessary instruments for the detection of uranium ore when making geophysical surveys and other surveys?


George Prudham: Yes, Mr. Chairman, the parties carry detectors when they are in an area in which there are prospects of that kind.
Mr. Foil well:	Will the minister state
whether any investigation is being conducted by his department in regard to finding tin in Canada? Are there any known deposits of tin in Canada now that are of commercial value?


George Prudham: Several prospects have been investigated but there have been no worthwhile results.


Percy Ellis Wright: When these parties have been out, have they made any discoveries? Have any mineral claims been filed by survey parties from the minister's department during the past year, with respect to either uranium or other minerals?


George Prudham: I do not know whether I quite understand the question. Does the hon. member mean to ask whether any claims have been filed as a result of our surveys?


Percy Ellis Wright: Yes; by the department itself, not by individual prospectors.


George Prudham: No. Any government official is barred from staking claims.


Percy Ellis Wright: The department itself does not stake claims?


George Prudham: No.


Percy Ellis Wright: Do they present the information to Eldorado which is a mining company
19. 1951	4327
Supply-Mines and Technical Surveys and which has an exploration department or subsidiary?


George Prudham: Yes. The information that our parties gather is available to private prospectors, to provincial governments or to anyone who is interested in developing the resources.


[Stage Direction]
Item agreed to.
Mineral resources investigations-
220.	Administration, operation and maintenance. $1,622,676.
Mr.   Baler@: I should like to advise the minister that I am interested in the Lloyd-minster oilfield. I notice that in the sessional committee on railways and shipping owned and operated by the government, on Tuesday April 17, 1951, Mr. Donald Gordon, president of the Canadian National Railways was asked whether that heavy type of oil in the Lloyd-minster field is suitable for use in locomotives. Mr. Gordon's answer is as follows:
Bunker C oil is used in our oil-burning locomotives; but diesel oil is used in our diesel operations. In western Canada our operations are almost entirely oil-burning. In fact, west of Edmonton we operate entirely with a converted type of oilburning locomotive in which we use bunker C oil. I might say that we are concerned about the supply of bunker C oil and we would like to see a very much greater development at the Lloydminster field.
I should like to ask the minister if this is the department that might assist in the further development of that field, as this oil is so necessary for the use of the oil-burning locomotives.


George Prudham: In our department we have a top-ranking authority on oil and gas in Canada in our director of scientific services. The department has made a geological survey of the Lloydminster area and has gone as far as it can in that regard. The information is available to anyone who is interested in exploration.


Joseph Warner Murphy: This item is for $1,622,676, approximately $101,000 more than it was a year ago. It includes administration, operation and maintenance. Can we get a breakdown of those figures? There are apparently three different items.


George Prudham: I would refer the hon. member to page 246. A complete break-down is given there. The salary allotment of this vote has been increased by $106,133. The remainder of the requirements have been reduced by $4,400, the vote as a whole being increased therefore by $101,733. With reference to salaries, although the number of positions provided for has been reduced by

Supply-Mines and Technical Surveys sixteen, statutory increases and general salary increases recently granted make necessary the provision of the additional funds.


[Stage Direction]
Item agreed to.
Mines branch-
221.	Construction or acquisition of new equipment, $296,000.
Agar Rodney Adamson: What new equipment?


Joseph Warner Murphy: I asked a question a few minutes ago. Can the minister now make a statement under this particular item? He might give the committee the information his department has.


George Prudham: Would the hon. member give me the question again?


Joseph Warner Murphy: A few moments ago I asked about the number of surveys that were being made. I will ask a few more questions which the minister can answer at the same time. Is the department working in conjunction with any other department in making those surveys for radioactive ore and with what results? If the minister is in a position to state the areas in which prospecting has been carried on, we should like to know.


George Prudham: No survey work is done under the mines branch administration. That is all chiefly laboratory work and research. I will try to answer that question under the geological survey item when it comes up.


Joseph Warner Murphy: A minute or two ago the minister said that some of the survey parties carried equipment-I imagine that would include geiger counters-where there is likely to be uranium. I do not know, but I imagine that statement rather needs an explanation. I cannot understand how they could determine where there is likely to be uranium and where there is not likely to be uranium, because it has been discovered in most unlikely places. The minister should know, anyway.


George Prudham: The general areas where these strategic minerals are likely to be found are fairly well plotted; and whereas the areas are not specifically known, they are generally known. When parties go into any of these particular areas, they go with the equipment that they think will be most useful.


Joseph Warner Murphy: Pursuing that subject, I should like to ask another question. Would it not be possible for the survey parties to carry geiger counters in these unlikely areas or would that not be convenient?


George Prudham: All parties that go into the radioactive areas of the Pre-Cambrian shield carry these geiger counters.


Joseph William Noseworthy: I notice that, as shown at page 247, in this particular division there are 168 permanent positions and 237 temporary ones. Can the minister explain why that branch requires so many more temporary employees than permanent ones?


George Prudham: This particular department has grown rapidly with the growth of radioactive research. Many of these employees are mill men and mechanics, and some of them are not the type that would likely become permanent. I think that is partly the explanation.


Joseph William Noseworthy: Just how long does an employee require to be with the department in order to secure a permanent appointment?


George Prudham: I understand that a branch of any department has to be established long enough to gain a certain standing with the civil service commission. Permanent appointments are decided by the civil service commission.
Mr. Nose worthy: The minister says "long enough". Will he specify just what "long enough" means?


George Prudham: I understand that any portion of a department that is considered to be a permanent operation is eligible to have its employees established on a permanent basis.


Joseph William Noseworthy: Does the explanation that the minister gives for this particular branch apply to all branches within his department? I computed that there are 745 permanent employees and 1,134 temporary employees in his department listed in the details of the services.


George Prudham: This department has been in being only a very short time. I am told that the proportion of temporary employees in this department is no larger than in other departments of the government. I do not know that I can be any more explicit than that.


Agar Rodney Adamson: This is a new branch dealing with radioactive ores.


Louis-René Beaudoin: We are dealing with item 221, construction or acquisition of new equipment.


Agar Rodney Adamson: I am dealing with the
second part of that item, investigations of radioactive ores.


Mr. Lesage:: That is the heading for the next three items.


Louis-René Beaudoin: As it is shown on the resolution that I have before me item 221 has to do with construction or acquisition of new equipment, $296,000. Item 222 is

investigations of radioactive ores, administration, operation and maintenance $240,760. Shall item 221 carry?


Percy Chapman Black: Before the item carries I should like an explanation of the large expenditure on new equipment in the two years, last year and this year. The amount of half a million dollars was expended or asked for, for the acquisition of tools and machinery and acquisition of research and scientific equipment. Last year the amount was $242,000. What is the nature of that machinery? Where is it used, and what class of work is it utilized for?


George Prudham: This vote provides for the purchase of capital equipment items for use in the laboratories and machine shops, and for replacement of motor vehicles.
Construction of a new machine shop and stores building is well advanced, and it will be occupied during this fiscal year. A large part of the machine tool equipment in use in the old shop is obsolete and incapable of doing fine work to the close tolerances required for development of metals for defence purposes. Lack of space in the old shop prevented the purchase and installation of any new equipment. With the additional space and improved facilities provided by the new building, it will be possible to instal new, modern lathes, shapers, milling machines, grinders, et cetera and $50,000 has been requested for this purpose.
An amount of $242,000 has been included for the purchase of scientific apparatus and machinery for use in the laboratories, and ore dressing and metallurgical mills. Approximately $136,000 of this amount is a revote for equipment for which funds were provided in 1950-51 but which was not delivered in that year. The balance is for new equipment for research on improved ore dressing and metallurgical processes in connection with strategic minerals and metals for defence purposes.


Percy Chapman Black: Where are these new buildings being located? Are they distributed in different provinces? Are any assigned to the maritime provinces, for instance?


George Prudham: No; the new buildings are on Booth street here in Ottawa.


Percy Chapman Black: The whole development is concentrated in Ottawa?


George Prudham: Yes, that is right. There is a very good reason for that. At the present time they are working very closely with the Chalk River project and with the national research council.
Supply-Mines and Technical Surveys


Gordon Knapman Fraser: There is one question that I should like to ask. In the details on page 248 I find "memberships, $1,000". It has been increased by $200 over last year. What is that for?


George Prudham: That amount is for the membership fees of the scientific staff in their various scientific societies and organizations.


Agar Rodney Adamson: What are the societies and organizations? Has the minister a record of them?


George Prudham: I have not a complete list, but there is the Engineering Institute of Canada and the Canadian Institute of Mining and Metallurgy.


Agar Rodney Adamson: Does the minister know how much each of these gets?


George Prudham: No; I have not the details here, I am sorry.


Joseph Warner Murphy: I notice one item here, "sundries, $6,500". Last year it was $15,400. Can the minister explain the difference?


George Prudham: That shows a reduction. The reason we are able to show a reduction there is that the new method of compiling the estimates made it possible to break the sundries item down into specific items a little closer this year.


Joseph Warner Murphy: Did any part of the difference between $15,400 and $6,500 go into any other departments?


George Prudham: No; it is allotted to specific items.


Joseph Warner Murphy: Can the minister tell the committee any particular items that were left out this year to represent the difference? It is a little over a third of what it was last year.


George Prudham: That item is smaller because we are not providing for so many unforeseen contingencies this year as last year. There is a good reason for that. The estimates are more specific this year, and probably a good portion of the money is allotted to specific items in a definite estimate. Probably a lot of this money is allotted to specific items.


Joseph Warner Murphy: What does the item represent? Will the minister give some illustrations?


George Prudham: This provision is for unforeseen expenses and contingencies not provided for in other primaries. Many of the costs chargeable to this item are expenditures for towel service, laundry, obtaining industrial water, gasoline samples and so on. A decrease of $4,500 is based upon recent experience and the intention to exercise the utmost economy.
4330	HOUSE OF
Supply-Mines and Technical Surveys


Percy Chapman Black: The item covering subscriptions, textbooks and other major library acquisitions is $8,500 this year as compared with $9,200 last year. What is the total investment in the library? Where is the library located? Is it open to the general public or only to the technicians and scientists ol the department?


George Prudham: The books referred to are available to the general public if they care to go to the Booth street office and inquire. This allotment covers the acquisition of reference text books for the mines branch library which services the department as a whole. The requirements for scientific textbooks do not diminish and the costs show a rising tendency, hence an increase in the allotment is required to cover greatly increased costs of binding and taking care of library acquisitions.


Agar Rodney Adamson: Does the department support the Canadian Arctic institute and the Canadian astronomical society? I understand that both societies receive grants from the department and I was wondering whether that was done through this or some other department.


George Prudham: I am told that if the Canadian Arctic institute is conducting a special project which this department thinks has merit we try to support it, but not on an annual basis.


Agar Rodney Adamson: What about the astronomical society?


George Prudham: Some of our scientists have membership, but not the department as a whole.


Joseph William Noseworthy: The first item on page 248 is $8,500 for overtime pay. What class of employee is paid overtime and what is the basis, straight time or time and a half?


George Prudham: This item is to provide for the payment of overtime to prevailing rates employees as provided by order in council. The increase of $2,500 is due to an increase in the hourly rates of pay for prevailing rates employees, the urgency of work on defence requirements and the need to accomplish moving of machines to the new mechanical shops with a minimum of interference with production.


Joseph William Noseworthy: I take it that none of these employees who come within the civil service would be eligible for overtime?


George Prudham: I have not that information, but I shall be glad to get it for my hon. friend.


[Stage Direction]
Item agreed to.
[Stage Direction]

Investigations of radioactive ores-
222.	Administration, operation and maintenance, $240,700.
Frank Sidney Follwell: How many mines are producing scheelite, and has the government entered into any arrangement with them by way of subsidy or special payment?


George Prudham: There is only one active mine, which I believe is owned by the Department of Defence Production.


Frank Sidney Follwell: The department owns the mine?


George Prudham: Yes.


Frank Sidney Follwell: Is the department negotiating with any mines at the present time, apart from the one the minister speaks of, for the production of scheelite?


George Prudham: No.


Frank Sidney Follwell: Is there any special inducement held out to geologists or prospectors to go out and look for thorium and uranium? Just how is the quest for these metals handled?


George Prudham: The development of radioactive ores is carried on largely by the crown company, Eldorado Mining and Refining Company. The incentive to contractors and developers is handled through that company.


Frank Sidney Follwell: The minister is unable to answer my question with regard to special inducements that are offered.


George Prudham: I am not able to answer that question.


Agar Rodney Adamson: On many occasions I have been asked what happens when a prospector brings a piece of radioactive ore to the department. I have had several complaints that they did not seem to be particularly interested. A prospector may have a sample of ore from a deposit which he may or may not have staked. He gets a geiger counter reaction from the ore but is interested in finding out from the department how much uranium oxide thei'e is in the sample. The percentage of uranium oxide in the ore indicates its value; it does not matter what reaction you get on the geiger counter. What is the procedure when a sample of ore is brought in to the department? What happens? And how is the prospector or developer informed about the value of the ore so brought in?


George Prudham: When a sample is sent in it is given a geiger counter assay and the percentage of radioactive material is determined. This usually takes about a day. If the

hon. gentleman knows someone who has been brushed off I should like to know about it and have the hon. gentleman tell him to come around again.


Agar Rodney Adamson: They were not particularly
interested in stating whether there was a geiger counter reaction. You could probably get a radioactive reaction from a geiger counter in this chamber. It is the percentage of uranium oxide that is of value. Does the department make a report giving the percentage of uranium oxide? Does the department say:	We have received the
sample, we have assayed it, it has a certain percentage of uranium oxide in it, and we think you had better go out and stake the deposit? Or does the department say: This is a valuable deposit and we think you should turn it over to the Eldorado Mining and Refining Corporation? I should like to find that out because the development of radioactive ores and uranium oxide is one of the most important we can carry on at the present time in Canada.
It is not particularly attractive commercially. There is only one buyer. There is a set price, and it is not a simple thing for the average prospector to discover. He gets a reaction on a geiger counter and he says: I have a deposit of uranium. Frequently he has not, but the decision whether he has or has not is one that the department, through technical officers, can make for him, or at least tell him whether he should go on. I should like to know what happens when a man brings in a sample of ore. I know the geiger counter readings and I know what happens, but what I am interested in is whether the department tells him it is a certain type of rock, what he should look for, and advises him how to continue the development of a potential property.


George Prudham: Both thorium and uranium
are radioactive, and to have a complete analysis of a sample there would have to be a chemical analysis which would take longer. That would be done by the mines branch if it was thought the sample warranted that amount of work. It can be told by preliminary tests whether it is rich enough for chemical analysis. Chemical analysis can take as long as a month to complete, but that is done whenever the specimen warrants it.


Agar Rodney Adamson: Can the minister say what
percentage of uranium oxide they consider valuable?


George Prudham: 0-50 per cent or more.
19. 1951	4331
Supply-Mines and Technical Surveys


Agar Rodney Adamson: Half of one per cent.


[Stage Direction]
Item agreed to.
224. To provide for payments to McGill university in connection with the development of a coal-fired gas turbine, $75,000.
Frank Sidney Follwell: The minister might give a
report to the committee on the development of this coal-fired gas turbine. I understand that the Union Pacific Railway is using such a gas turbine on some of their lines running west to the coast. I am wondering if it would not be well to have a report as to what particular development is being carried on, and what progress is being made by this group at McGill university.


George Prudham: An order in council was
passed on November 4, 1950, authorizing the Minister of Mines and Technical Surveys to enter into an agreement with McGill university under which the university will be reimbursed for its costs in developing a coal-fired gas turbine in an amount not exceeding $125,000. The work of developing a prototype turbine will be carried out in the dynamics laboratory of the university under the direction of Professor Donald L. Mordell. A successful design is expected to reduce railway transportation costs and the costs of electric power developed from coal, and will assist the Canadian coal industry by widening its markets. At the present time I understand the project is still on the drawing board and they are not quite ready to start the actual construction of the experimental model.


Agar Rodney Adamson: There is no prototype yet?


George Prudham: No.


Percy Chapman Black: I notice that
this experiment is being carried on at McGill university. I would think that an appropriate place to have this undertaken would be at one of the colleges in the maritime provinces. The maritime provinces produce coal, and it is most necessary that there be a permanent market for the product. I would ask the minister if any such experimental work has been pursued in any of the maritime universities.


George Prudham: In this particular case the
job went to the man with the idea. Professor Mordell was the originator of this idea, and it looked so good that the department decided to back him on it. As he is a professor at McGill university the experiment is being carried on there. I think I can tell my hon. friend that if any similar good ideas come out of the maritimes we will be glad to look into them.


[Stage Direction]
Item agreed to.
[Stage Direction]
Supply-Mines and Technical Surveys Geological Survey of Canada-
225. Geological survey administration and miscellaneous services, including the expenses of the national advisory committee on research in the geological sciences, $156,527.
Agar Rodney Adamson: I should like to ask the
minister to give me the number of parties who are doing surveys this year, who is the head of the -service this year, and what districts the parties are in. I should like this information because I should like to know, and I think the mining people would like to know, what new maps can be expected in the forthcoming year. I should also like to ask what provincial governments are co-operating at the present time in this work. I know that the department of mines of Ontario is doing a similar type of work. What co-operation is being received from provincial governments and in what districts?


George Prudham: This information has
already been released to the press. The geological survey has eighty-eight parties in the field. Assessment of strategic minerals including tungsten, molybdenum, chromite and antimony, which are essential to Canada's defence program, will form an important part of this year's program of the geological survey. The work is to include further examination and mapping of the Quebec-Labrador iron region, mapping of areas believed to be favourable for the occurrence of oil, gas and coal, and examination of uranium-bearing deposits. The staff of the regional office established in Calgary last year will examine a great number of drill cores and cuttings available in that area to aid in the interpretation of the stratigraphy of the oil fields. Examination of glacial deposits including gravel, clay and sand, and the study of the ground water resources, will be extended to include the important industrial areas of Montreal and Vancouver. A special detailed study of the Sydney coal fields of Nova Scotia will be continued as an aid to the industry in planning further development of coal deposits. Parties have been arranged as follows:
Northwest Territories	 7
Yukon	 5
British Columbia	 16
Alberta	 U
Saskatchewan	 6
Manitoba	 [DOT] [DOT] [DOT]	6
Ontario	 6
Quebec	 7
Quebec-Labrador	 4
New Brunswick	 3
Nova Scotia	 3
Newfoundland	 7
In addition six geologists will be assigned to the strategic minerals investigation in various parts of Canada, and two to the 
investigation of radioactive minerals. The head of the department is Dr. W. A. Bell.


Mr. Kent:: The minister said there were
seven geological survey parties for Newfoundland. I wonder if he would say in what parts of Newfoundland that work was carried out.


George Prudham: At Campbellton, there is one-mile mapping of base metal areas, and the same at Springdale. At Holyrood there is an examination of manganese deposits and stratigraphic studies. On the coast of Labrador there is reconnaissance relating to metallic minerals. In western Newfoundland there is examination of chromite deposits. At Terrence-ville there is a continuation of geological mapping. In Ungava there is a detailed examination of the iron belt. At Willbob lake there is continuation of one-mile mapping of the iron belt, and the same at Griffis lake. At Grand Falls there is four-mile mapping of the iron belt.


William Joseph Browne: Is the
minister familiar with the bill recently introduced in the provincial legislature which would turn over to a corporation all the natural resources still ungranted? Will that affect the geological surveys the government is carrying on?


George Prudham: I am not aware of the situation referred to by the hon. member, but it would not affect our surveys.


Mr. Sinnoli:: Would the minister be good enough to give us the location of the surveys in Manitoba?


George Prudham: In southwestern Manitoba, continuation of four-mile mapping of drift cover and study of ground water resources; at Cranberry Portage, one-mile mapping of metal bearing areas, and the same at Elbow lake; at Churchill, stratigraphic studies relating to oil and gas, and the same at lake Winnipeg.


William Joseph Browne: Who determines the areas to be studied by the geological parties? On previous occasions I have brought up this matter, and I am wondering why no party is investigating the west side of Placentia bay, which is highly mineralized and which has been recommended to Mr. Howse on many occasions for that purpose. I believe recently the premier of Newfoundland has become interested; still we cannot get a geological survey there. I wonder if the hon. member for Burin-Burgeo could use his influence with the government to have a party sent there. For many years crown grants have been made to people who have worked mines in that area, but without good geological reports it is impossible to

properly develop them. I wish the government would give consideration to placing a party in that field soon.


George Prudham: These survey programs are always planned in co-ordination with the provinces so there will be no overlapping.


William Joseph Browne: That would be with Mr. Howse down there?


George Prudham: That is right.


William Joseph Browne: Then I take it Mr. Howse has not recommended that any survey party should go to that area.


George Prudham: We usually accept his
recommendations, but we do not necessarily act in all cases on the recommendations of the provincial governments.


William Joseph Browne: Can the
minister say whether Mr. Howse has made any recommendation that a party should survey that area?


George Prudham: We have not that information.


Mr. Riley:: Would the minister let us know the location of the proposed surveys in New Brunswick this year?


George Prudham: At Woodstock, one-mile
mapping of metallic minerals and manganese deposits; at Bathurst, the same; at Fredericton, mapping of the drift mantle.


Frank Sidney Follwell: I understood the minister to say there would be six geological survey groups in Ontario. Would he tell the committee where they will be operating and what they will be doing?


George Prudham: The geological survey parties in Ontario will be working in the Ottawa area, survey of ground water resources; southwestern Ontario, stratigraphic studies relating to oil and gas; the same in the Niagara escarpment; in southwestern Ontario, collection of data on oil and gas wells; at Rice lake, continuation of mapping of the drift mantle.


Percy Chapman Black: There are three such parties in Nova Scotia. The minister has given the particulars for the other provinces; I would like them for Nova Scotia.


George Prudham: At Sydney, detailed study of the coal field; at Truro, one-mile mapping of industrial mineral area; at Stewiacke, mapping of drift mantle.


Gordon Knapman Fraser: A moment ago the minister mentioned Rice lake. Is that Rice lake, Ontario?


George Prudham: Yes.
Supply-Mines and Technical Surveys


William Joseph Browne: Is any aerial magnetometer surveying going on in Newfoundland this year under the auspices of the federal parties?


George Prudham: No magnetometer survey work is planned for Newfoundland this year. The department has only one plane equipped for that purpose, and it is being used in areas where it is thought that strategic metals may be found.


Agar Rodney Adamson: I was interested and pleased, I may say, to see that the department is doing so much work in connection with our ground water resources. I assume it is preparing water tables of certain areas of Canada. Having in mind the chronic water shortage in large areas of the United States, has the minister any information on the extent of the ground water resources and the lowering of the water tables in the prairie provinces and in southwestern Ontario? I know that the water table is going down, and it is causing some concern in certain areas. Is this condition general, and is the department in any way concerned over the destruction of our essential ground water resources?


George Prudham: Our department is carrying out a study of the water resources, chiefly in Ontario and the prairie provinces. This action is taken in co-operation with the provinces, so there is no overlapping of such work.


Agar Rodney Adamson: I know that the province is doing that work. As a matter of fact, I have some friends actually engaged in the ground water surveys at the present time. Is any information available? Are the ground water levels dropping? Is there any concern about our essential ground water resources? After all agriculture, and as a matter of fact life itself, depends on water. It is one of the most serious questions today in the Pacific coast area of the United States, particularly California. The destruction of the ground water resources in that area seriously jeopardizes the whole population.


George Prudham: It is only within the last few years that we have started this type of survey. So far it has been conducted only in certain districts, and I have not got the complete results here. I can say that certain industrial areas are becoming concerned about the water supply, and the results of our survey show that they have reason to be worried.


Agar Rodney Adamson: That is exactly the information which I believe the country should have before we reach the stage of a chronic lack of water. What does the department intend to recommend? Where are the districts which are already showing shortages of
4334	HOUSE OF
Supply-Mines and Technical Surveys ground water? Has the government, through the department, any suggestions for the preservation of this source of life? Large areas in the world have been destroyed through the destruction of the ground water reserves. I do not think anything could be more important than this work that the department is doing.


Mr. Balcom:: Can the minister tell me whether any surveys have been made in Nova Scotia?


George Prudham: In relation to water?


Samuel Rosborough Balcom: Yes.


George Prudham: No, there have been no surveys in Nova Scotia.


Agar Rodney Adamson: Has any work been done on the Peel plain and the interlobate moraine in Ontario?


George Prudham: Not specifically, Mr. Chairman. At the present time we are endeavouring to train a competent staff, and probably next year we shall be asking for a bigger vote for this purpose. I hope the hon. member will remember it at that time.


Agar Rodney Adamson: I shall certainly support the minister. He mentioned somie areas in which there is already a shortage of ground water. Can he say where those areas are? I believe it is important, particularly in planning defence construction. If a defence plant were built in a district in which you are going to have a shortage of ground water, you are going to add a tremendous burden of expense in the operation of that plant, in connection with housing and other ancillary operations. Can the minister say where there is a shortage of ground water at the moment?


George Prudham: I am not prepared to say where there is a shortage. There is a special study being made of the Montreal area and the Ottawa area this year. The results are not yet known.


Percy Chapman Black: I should like to have a statement from the minister with respect to the enormous iron ore bodies in Labrador. I understand there is one survey party making an examination of those ore bodies. What progress has been made, and what progress has been made in surveying the enormous ore deposits at Steep Rock in western Ontario?


George Prudham: The department is making a study of the area, and making maps. We are working closely with the companies that are engaged in the development work there. The Ontario department of mines is carrying on a geological study of the Steep Rock area.


Percy Chapman Black: Where do the minister's department and staff co-ordinate or overlap with the provincial departments of mines? Most of the provinces have mining departments of their own. He states he works in co-ordination with them, but where does the primary responsibility rest?


George Prudham: That work is co-ordinated through committees that are set up. There is what is called a provincial mines ministers' conference. In some cases the provinces ask our department to make a general survey, and they carry out detailed studies of the ore bodies.


Percy Chapman Black: Has the minister's department made a complete survey showing the tonnage of iron ore in the Labrador area and in the Steep Rock deposits? Has there been an estimate of the tonnage in those respective districts?


George Prudham: This department does not carry out any drilling or any work that would prove up tonnages, but we do record the information that is gathered by the companies doing the development work.


Agar Rodney Adamson: What about the geophysical work that is carried out under this item? How many of these survey parties are conducting geophysical surveys? I mention this, Mr. Chairman, because the modern, method of prospecting is through the discovery of what are known as anomalies which are discovered by geophysical methods. They do not show that there is an ore body or they do not show that there is any particular type of ore there; but they certainly show that there is an alteration of the density of the rock underground and show a contact zone between the two different kinds of rocks which is generally a host condition to ore of various kinds. For instance, Lynn Lake I think was initially discovered almost entirely through geophysical methods. It is a method that is being perfected or is being largely developed by Canadian engineers and Canadian scientists. What are the department doing along geophysical lines and what are they doing with regard to geophysical work from the air?


George Prudham: We have only one airborne magnetometer. As to Lynn Lake, I think the hon. member is mistaken. That survey work was done by ground work.


Agar Rodney Adamson: Yes; but it was geophysical work.


George Prudham: We hope to have our airborne magnetometer wTorking in the eastern

townships this year. We still have to depend upon a supplementary estimate if we put it to work.


[Stage Direction]
Item agreed to.
Surveys and mapping branch- [DOT]
228.	Surveys and mapping branch administration, $39,255.
William Joseph Browne: I should like to ask the minister if he has any parties working on this work in Labrador this year.


George Prudham: In Newfoundland we have a party working on a one-mile topographical survey in the Avalon peninsula southeast; a one-mile topographical in the Avalon peninsula southwest and also in the Harbour Grace district.


William Joseph Browne: Has the
minister anything in Labrador?


George Prudham: In Quebec, New Brunswick and Newfoundland we have a one-mile topographical survey as a helicopter operation. We have a geodetic survey doing triangulation work in the Knob lake area, from Knob lake iron area to Fort Chimo and also an exploratory party establishing control areas in the Ungava peninsula.


John Sylvester Aloysius Sinnott: It is definitely known that in the lake Dubonnet, Bird river and Cat lake area, there are large deposits of minerals. I should like to ask the minister if he will investigate and have this matter brought to the attention of the officials during this coming year?


George Prudham: I think the mineral my hon. friend refers to is spodumene. At the present time, at the mines, branch experiments are being carried on with the mineral to determine its content.


John Sylvester Aloysius Sinnott: There is plenty of nickel, copper and zinc in the same area.


[Stage Direction]
Item agreed to.
Topographical surveys, including expenses of the Canadian board on geographical names-[DOT]
229.	Administration, operation and maintenance, $1,367,946.
Agar Rodney Adamson: This is the topographical
survey as distinguished from the geological survey. This is the survey giving the physical outline of the country. I should like to know how much of the country is mapped. A minute ago the minister said that apparently there was some distinction as to jurisdiction between the provinces and the Northwest Territories, and that the Minister of Resources and Development had the Northwest Territories and that the Minister of Mines and Technical Surveys had the provinces. At least that is what I gathered from
Supply-Mines and Technical Surveys his remarks. I assume that this topographical survey is being done eight miles to the inch, and that it is being done by aerial photographs. I should like to know how this is co-ordinated with the detailed maps of the Department of National Defence.


George Prudham: The army survey establishment works co-operatively with the topographical survey. So far as this work is concerned, there are no provincial boundaries.


Agar Rodney Adamson: Therefore you map the
Northwest Territories through this survey?


George Prudham: Yes.


Agar Rodney Adamson: How far north have the
maps been completed so far?


George Prudham: So far, only in the Yellowknife area and in certain blocks north and northeast of the Yellowknife area.


Agar Rodney Adamson: You followed the Mackenzie river and other water courses. Have you plotted river basins and drainage areas or have you plotted the northern limit of trees and the northern limit of certain types of vegetation?


George Prudham: The whole area has been
mapped by air photography but larger scale maps only have been produced so far in the areas that are highly mineralized and are likely to be available for immediate development.


Agar Rodney Adamson: Those are topographical
maps?


George Prudham: Yes.


Agar Rodney Adamson: And the maps are at the
present time eight miles to the inch or four miles to the inch?


George Prudham: Four miles to the inch.


Agar Rodney Adamson: And it is the intention of
the department to map an inch to the mile?


George Prudham: Yes; in mineralized areas.


[Stage Direction]
Item agreed to.
Canadian hydrographic service, including Canada's annual contribution of $5,750 to the international hydrographic bureau-
231. Administration, operation and maintenance, $1,575,902.
Frank Sidney Follwell: I should like to ask the minister what is planned with regard to hydrographic surveys this year and how many boats will be used.


George Prudham: The projects for this year
are as follows: charting Newfoundland and Labrador by the ship Acadia; charting Newfoundland and gulf of St. Lawrence by the ship Cartier; charting Newfoundland and
4336	HOUSE OF
Supply-Mines and Technical Surveys Nova Scotia by the ship Fort Frances; charting Newfoundland and Nova Scotia by the ship Kapuskasing; charting Hudson strait and Labrador by a chartered vessel; charting British Columbia by the William J. Stewart; charting British Columbia by the Parry; charting the great lakes by the ship Bayfield.


Agar Rodney Adamson: Have we a contour map
of the ocean shelf along the Grand Banks? I mention this because the United States hydrographic board have recently intensified their work mapping the coastal shelf, particularly the Atlantic coastal shelf. Are we co-operating with them and mapping this shelf on a joint basis? Is there any work being done on the southern limit of perma frost? Will that come out of this item? Are we doing any work particularly along the shores of Hudson bay?


George Prudham: Our department has not
done any work in that area in recent years, but the joint defence planning board-I think that is the name-of the United States and Canada have a long range program. I believe that the United States navy are carrying on some work in that area at the present time.


Agar Rodney Adamson: Does the minister's department co-operate with the United States navy and carry on joint surveys of the ocean shelf? It is very important not only from the defence point of view and the fishery point of view, but its importance is becoming more and more realized as the years go by, particularly with regard to the shore shelf of the oceans surrounding Canada.


George Prudham: There is no official joint
program, but there is a long range general program, and there is close co-operation between the two.


Agar Rodney Adamson: I do not know whether it
would come under this item but does the minister do anything with regard to the southern limit of perma frost and the depth of perma frost surrounding Hudson bay? Have any drillings been made with regard to the depth of perma frost, the intensity of perma frost and the southern limit of it on the continent? I realize that it is a comparatively new study, but it is one of the most important investigations that we can make.


George Prudham: Both the geological survey
and the dominion observatories are carrying out studies on perma frost this year. There is an investigation being carried on at Resolute bay.


[Stage Direction]
Item agreed to.
[Stage Direction]

Canadian hydrographic service-
232. Construction or acquisition of new equipment, $168,916.
Percy Chapman Black: What is this
appropriation for? I cannot help noticing, and I suppose, other hon. members as well, that a great many votes are being asked for for construction or acquisition of new equipment. I mentioned one earlier. Just recently we called item 230, which had to do with the same subject, and hon. members on the other side of the house called "carried". I notice that some hon. members over there are more interested in having it carried than in obtaining information. I do not think anyone in the committee is disposed to hold up this minister's estimates, but when item 230 was carried it provided for $134,000 for the construction or acquisition of new equipment. The item which we have now called is for the construction . or acquisition of new equipment and the amount is $168,916. Down below we have another item, item 237, which is for construction or acquisition of new equipment, and the amount is $135,335. Will the minister give some explanation of these large expenditures following other expenditures and probably others in previous years? Where are these acquisitions stored? What does the total amount to? I assume a tabulation is produced each year and kept by the department, and an inventory is kept, and the material is properly looked after, and not left out in the weather as we have heard happens with machinery that is purchased in the western provinces. We have heard complaints that farm machinery is purchased out there and allowed to be exposed to the weather and deteriorate. Can the minister give the committee some information?


George Prudham: The item of construction and acquisition of new equipment is charged to each branch in the department, each being a separate item. This particular item, 232, has to do with Canadian hydrographic service. This vote is to provide mainly for the acquisition of equipment required for the charting of Canadian coastal and inland navigable waters, the investigation of tides and currents, and the preparation of plans and specifications for a new hydrographic ship for northern waters.
We had that item in the estimates this year, a vote of some two million dollars for a new ship which is very badly needed, but in the interests of economy we were asked to take it out of the estimates. We did. An item was left in the estimates for the preparation of the plans for that ship so that we can proceed when the money is available.


[Stage Direction]
Item agreed to.

235. Legal surveys and aeronautical charts, administration, operation and maintenance, including a grant of $350 to the Canadian Institute of Surveying, and the expenses of the board of examiners for dominion land surveyors and payment of fees of B. W. Waugh, J. L. Rannie and J. E. R. Ross, members of the board, and A. W. Cole, secretary of the board, $548,907.
Gordon Knapman Fraser: Can, the minister give us a little more detail here, because we have legal surveys and aeronautical charts? Then we have administration, operation, maintenance, and then we have tees. I should like to have it split up so that we shall know what it is.


George Prudham: This vote is for legal surveys and aeronautical charts, including a grant of $350 to assist in printing the publication of the Canadian Institute of Surveying and Photogrammetry and $4,250 to cover the fees and other expenses of the board of examiners for dominion land surveyors.
The purpose of this vote is to maintain the legal surveys and aeronautical charts division which undertakes all legal surveys of crown lands in the Yukon and Northwest Territories, of national parks, and Indian reserves, and legal surveys required by the departments of the government of Canada; the preparation of electoral district maps; the plotting, preparing and maintenance of aeronautical charts of all kinds for civil and military purposes; the preparation of air flight manuals; the maintenance of a central distributing agency for charts, maps, plans and technical publications, and the maintenance of the central office for indexing, filing and recording survey returns and plans and supplying information from them. This vote also includes provision for the fees and expenses of the board of examiners for dominion land surveyors. In previous years this was a separate vote.


Gordon Knapman Fraser: That is the reason I asked it.


[Stage Direction]
Item agreed to.
Map compilation and reproduction-
237. Construction or acquisition of new equipment, $135,335.
Percy Chapman Black: We have the same item here again. What is it for? The minister did not answer my last question. What becomes of the machinery after it is acquired by the department from year to year? Is it kept under proper care and is an inventory taken from year to year? I am not going into what has been voted Under this item in previous years as it runs into enormous sums for the acquisition of machinery, and so on.


George Prudham: Because of national defence requirements and a general increase in our survey program, there has been an enormous increase in our mapping programs. This
Supply-Mines and Technical Surveys vote provides for the acquisition of map reproduction equipment. Because existing government map producing plants have proved to be inadequate in keeping pace with the demand for maps for civil and military purposes, and because they lack the facilities to produce the type of maps required today, consideration has been given to setting up a modern map production unit to handle all government map printing. With this end in view, the services of an independent expert on map printing were retained to make a survey of existing facilities and to make recommendations for an adequate plant. His report has been received and in it he recommends the equipment which should be acquired to bring about the desired improvement in map reproduction. The amount submitted in this vote is for the purchase of this new equipment.
I can assure the hon. gentleman that this equipment is well cared for. It is kept in central warehouses in various areas where it can best be distributed to the survey parties in the field.


Percy Chapman Black: What is the total investment in machinery and equipment under this heading?


George Prudham: I am sorry, but we have not a complete up-to-date inventory.


[Stage Direction]
Item agreed to.
Geographical branch-
238. Geographical branch-administration, operation and maintenance, $240,711.
Agar Rodney Adamson: Does the department cooperate with the American geographical society, which is probably the world's finest mapmaker. The present head of this society is a Canadian, which prompts my question.


George Prudham: I understand that the geographical societies of Canada and the United States are private societies. There is no direct co-operation or co-ordination between our branch and those societies.


[Stage Direction]
Item agreed to.
B-Dominion coal board-
243. Administration and investigations o£ the dominion coal board, $108,685.
Mr. Hansell:: Are there any signs of large developments in the coal-mining area west of Okotoks and High River in the Priddis area, and south in Alberta? I am not asking that developments be carried on there because I know that a strip mine is turning out fairly good coal, but I do believe the possible development of this area has been somewhat over-expressed. The story has gone out that great things are about to happen in that area and I should like the minister to tell us

Supply-Mines and Technical Surveys if that is so. I am inclined to think that that expectation is without very much hope.
People have been induced to invest money when perhaps the investment will not be to their benefit, at least for a long time. I do not know whether the minister has any information, but I think it is important that people should know whether they can expect any great developments if they invest their money. I recall two years ago a man came to me and said that a railroad was to be built into this area within sixty days. I said, "I am not a betting man, but I do not like the truth to be misrepresented. I am willing to bet you $100 that there will not be a tie or piece of machinery in there within the next six months, let alone the next sixty days". He said he had inside information. I said, "I do not care what information you have, put up your hundred bucks". He did not put up his hundred bucks, but I happen to know that others did put money in and, I am afraid, lost it. That is why I am asking the minister if he can state whether there is any expectation of great commercial development in that area.


George Prudham: I have no information and I do not know of any prospective development.


Louis-René Beaudoin: Shall the item carry?


Percy Chapman Black: I think we have made pretty good progress. This item is of importance to all Canada and I do not think we should rush it through. I have no criticism to offer of the work done by this board over the years; on the contrary, I pay it a great tribute for the work it has done in connection with the development of our coal areas.
Item stands.
Progress reported.



BUSINESS OF THE HOUSE

Alphonse Fournier: Tomorrow we will give third reading to Bill No. 381, to amend the National Housing Act; then Bill 390, respecting grants to municipalities; Bill No. 376, to authorize the Canadian National Railways to construct a railway from Sherri-don to Lynn lake; Bill No. 392, respecting the Canadian National Railways and to provide for the refunding of financial obligations; and Bill No. 393, to authorize the Minister of Finance to meet certain capital expenditures and capital indebtedness of the Canadian National Railway system. We will afterward move to go into committee of supply and consider the estimates of finance, public works and secretary of state.


Donald Methuen Fleming: In that order?
XMr. Hansell.]


Alphonse Fournier: Finance will be first.


[Stage Direction]
At eleven o'clock the house adjourned, without question put, pursuant to standing order.
[The following items were passed in committee of supply]:

[Stage Direction]
A-Department-
Administration services-
217.	Departmental administration, $398,452.
Explosives Act administration-[DOT]
Explosives Act-
218.	Administration, operation and maintenance, $88,164.
Mines branch-
219.	Mines branch administration, $70,093.
Mineral resources investigations-
220.	Administration, operation and maintenance, $1,622,676.
221.	Construction or acquisition of new equipment, $296,000.
Investigations of radioactive ores-
222.	Administration, operation and maintenance, $240,760.
223.	Construction or acquisition of new equipment, $56,900.
224.	To provide for payments to McGill university in connection with the development of a coal-fired gas turbine, $75,000.
Geological survey of Canada-
225.	Geological survey administration and miscellaneous services, including the expenses of the national advisory committee on research in the geological sciences, $156,527.
Geological surveys, including an amount of $2,400 for Canada's share of the cost of the committee on mineral resources and geology, London, England^-
226.	Administration, operation and maintenance, $1,414,173.
227.	Construction or acquisition of new equipment, $154,500.
Surveys and mapping branch-
228.	Surveys and mapping branch administration, $39,255.
Topographical surveys, including expenses of the Canadian board on geographical naimes-
229.	Administration, operation and maintenance, $1,367,946.
230. Construction or acquisition of new equipment, $134,000.
Canadian hydrographic service, including Canada's annual contribution of $5,750 to the international hydrographic bureau-
231.	Administration, operation, and maintenance, $1,575,902.
232. Construction or acquisition of new equipment, $168,916.
Geodetic survey of Canada-
233.	Administration, operation and maintenance, $661,935.

234.	International boundary commission-administration, operation and maintenance, $59,274.
235.	Legal surveys and aeronautical charts, administration, operation and maintenance, including a grant of $350 to the Canadian Institute of Surveying, and the expenses of the board of examiners for dominion land surveyors, and payment of fees of B. W. Waugh, J. L. Rannie and J. E. R. Ross, members of the board, and A. W. Cole, secretary of the board, $548,907.
Map compilation and reproduction-
236.	Administration, operation and maintenance, $558,544.
237.	Construction or acquisition of new equipment, $135,335.
Geographical branch-
238.	Geographical branch-administration, operation and maintenance, $240,711.
Supply-Mines and Technical Surveys
Dominion observatories-
Dominion observatory, Ottawa, including membership fee of $500 to the international astronomical union-
239.	Administration, operation and maintenance, $332,148.
240.	Construction or acquisition of buildings, works, land and new equipment, $118,440.
241.	Dominion astrophysical observatory, Victoria, B.C.-administration, operation and maintenance, $84,340.
General-
242.	Payments to Royal Canadian Air Force and commercial companies for air photography, and to defray the expenses of the interdepartmental committee on air surveys, $1,340,000.
[Stage Direction]
Wednesday, June 20, 1951